1951-10-15

HIS MAJESTY THE KING


Mr. Speaker:: I beg to inform the house that in accordance with the wishes of the members I sent a cablegram to the secretary to His Majesty the King, expressing our gratification at the constant progress towards recovery which His Majesty is making. I have now received a cablegram in reply from the private secretary to His Majesty, which I shall read. It is as follows:
Buckingham Palace, London.
The Speaker,
House of Commons,
Ottawa.
The King sincerely thanks all members of the House of Commons of Canada for their kind message which has given His Majesty great pleasure.
It is signed by the private secretary to His Majesty.



CRIMINAL CODE


Mr. Wilfrid LaCroix (Quebec-Monimorency) moved: for leave to introduce Bill No. 11, to amend the Criminal Code.


Some hon. Members:: Explain.


Wilfrid Lacroix: Contrary to what has been reported by a newspaper in Montreal, it is not the purpose of this bill to outlaw the communist party. The sole object of this particular bill is to forbid the distribution and circulation of communist newspapers and subversive propaganda through the mails because their insidious campaign is destroying inch by inch that for which we are spending millions. There is already a law in the province of Quebec forbidding such distribution but of course not by mail, as that is under federal control.
Motion agreed to and bill read the first time.



PENSIONS


[Stage Direction]
On the orders of the day:
Mr. G. A. Cruickshank (Fraser Valley):: Will the government make a statement at an early date in connection with the increase of basic pensions for veterans?


Hon. Hugues Lapointe (Minister of Veterans Affairs):: I have received inquiries touching upon this matter from various members of the house. In answer to the hon. member for Fraser Valley, I wish to say that the government has been considering all veterans legislation and the advisability of appointing a committee, and an announcement will be made at an early date concerning the same.



MING SUNG INDUSTRIAL COMPANY


[Stage Direction]
On the orders of the day:
Mr. George A. Drew (Leader of the Opposition):: I wish to direct to the Prime Minister a question of which I have communicated notice to him. Has default in payment due to the government of Canada by the Ming Sung company actually taken place? Has the company taken steps to avoid seizure of their ships? If so, what steps has the government taken to prevent their continued use of the Canadian flag?


Hon. Douglas Abbott (Minister of Finance):: Perhaps I might be permitted to answer that question. I got back only this morning and I shall have to ask my hon. friend to permit me to take his question as a notice and I will give him a full statement tomorrow. The Ming Sung company were unable to meet the principal instalment of $1,200,000 odd, which fell due on June 30, within the time stipulated in the contract. They did pay the interest, but they were unable to meet a further interest payment due on September 30. The banks have asked the government to implement its guarantee, and the government has done so. The banks have been requested to institute appropriate legal proceedings under the mortgages and my information is that those proceedings are under way. I will give my hon. friend a full answer to his question tomorrow.

Inquiries of the Ministry


George Alexander Drew: I accept the reasons put forward by the Minister of Finance (Mr. Abbott) for the delay in giving a detailed explanation, but I would hope that he could answer now whether the right to use the Canadian flag has been withdrawn.


Douglas Charles Abbott: So far as I am aware it has not.



QUESTION AS TO FARMERS SECURING BANK LOANS ON BASIS OF STORED WHEAT

[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Lake Centre):: Mr. Speaker, I should like to direct a question to the Minister of Finance in connection with a situation existing in the western provinces where numbers of farmers are unable to secure loans on the basis of their stored wheat because the chartered banks feel that such loans should not be made. Is the minister in a position to advise whether the chartered banks may make such loans in order to meet current harvesting needs and the like to relieve a serious situation in various parts of the prairie provinces?


Douglas Charles Abbott: My hon. friend was good enough to give me notice of his question. He will appreciate that his question is a legal one, but my recollection is that the banks are allowed to make loans under the provisions of the Bank Act and to take wheat as security under section 88.


John George Diefenbaker: May I ask a supplementary question. The bank managers say that under the agreement between the government and the chartered banks loans such as that are not to be made.


Douglas Charles Abbott: Of course, that is incorrect.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. W. J. Browne (St. John's West):: I
should like to ask the Minister of Fisheries a question with reference to payments to Newfoundland fishermen recommended by a recent report of the fisheries prices support board. Does the minister intend to table that report?


Hon. R. W. Mayhew (Minister of Fisheries):: I received notice of my hon. friend's question just before coming into the house. I might say that we received the report of the fisheries prices support board some time ago. We acted on the recommendations made and a press release was issued on October 4. If my


hon. friend has not seen that press release in his local papers I would be glad to let him have a copy.


William Joseph Browne: I have seen the press release by the minister, but I was wondering if he intends to table the report of the board setting out the reasons why the recommendations were made.


Robert Wellington Mayhew: When the report is final that will be done.



INCOME TAX


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a question to the Minister of Finance? In view of a recent decision of the income tax appeal board to the effect that expenses of lawyers attending conventions of the Canadian Bar Association are deductible for income tax purposes, will steps be taken to extend the same privilege to trade unionists attending their conventions as well as to other comparable groups?


Douglas Charles Abbott: I have had no notice whatever of this question and I suggest that it is one which might be placed on the order paper. In any case I shall take my hon. friend's question as a notice.



SPEECH FROM THE THRONE


[Stage Direction]
The house resumed, from Friday, October 12, consideration of the motion of Mr. Robert Cauchon for an address to His Excellency the Governor General in reply to his speech at the opening of the session.
George Alexander Drew: Mr. Speaker, before proceeding with the remarks that I propose to make on the address in reply to the speech from the throne, may I go beyond the usual formalities and extend my congratulations to the mover (Mr. Cauchon) and the seconder (Mr. Simmons) of this address. The mover spoke of the unity, understanding and good will which he has encountered, sentiments which I am sure will be reciprocated by every member of this house. In addition he used both languages in a manner that was the envy of most of us here.
I wish also to say something about the remarks of the seconder. He spoke in terms of great optimism of the vast northern constituency which he represents. As one who

has had the privilege as a visitor of seeing extensive parts of that great northland on different occasions, I share the optimism which he has expressed about its future. I think it is a good and healthy thing to place before the young people of this country, through reports emanating from this house, some idea of the immense and untapped resources that still lie across the north of Canada.
Many people still have the idea that up above the comparatively narrow southern belt, which is more closely populated and which stretches from the Atlantic to the Pacific, there is nothing but great wastes, with little opportunity for population in the years ahead. Population goes to those places where work can be had, and work is going to be found for scores of thousands in this area where Providence has placed such immense resources for our use.
I simply wish to express my good wishes to the mover and seconder and to say that I believe they performed their task in a manner acceptable to all hon. members. In the very nature of things there were perhaps one or two remarks about which we may not be prepared to go the whole way, but I would have been a little surprised if they had been less enthusiastic about those with whom they are associated in their own activities.
I feel sure that every member of this house will join in the satisfaction expressed in the speech from the throne regarding the king's steady recovery, and the warmth of our welcome to his daughter and her husband. During the past week there has been convincing evidence of that deep and abiding affection with which the members of our royal family are regarded in their individual capacity and, more important still, as worthy representatives of that continuing monarchy, which symbolizes the freedom, tradition, unity and purpose of that great world fellowship which expresses its loyalty to one crown.
I am sure that with the facilities which science has now made available to all of us the king and queen have been greatly heartened by what they have heard of the affectionate and unstinted welcome which has been extended everywhere to Princess Elizabeth and the Duke of Edinburgh. To all of us who regard our democratic monarchy as an institution of profound and continuing importance in these uncertain days, not only to us but to the peace and stability of the whole free world, there has been a great measure of comfort and confidence in the spontaneous and unreserved expression of loyalty to our future queen.
The Address-Mr. Drew
On this subject I doubt if there is any measure of disagreement among the members of this house. On a number of other subjects mentioned in the speech from the throne there will also be general agreement. There is of course nothing really new in what it says. It is merely a government agenda of remaining business for 1951, which under our parliamentary procedure the governor general has been called upon to read.
The fact is that we should not be discussing at this time any of these subjects in relation to a new speech from the throne. We should be continuing the session which was adjourned on June 30, and for reasons which are more compelling than those we had before us at the time I expressed that opinion in June when the plans for a new session were announced.
At the time it was indicated that there would be a second full session this year. I am sure it was generally believed that there would be a second budget introduced to provide the means by which a universal old age pension at the age of 70 would be placed upon a contributory basis. I can think of no other reason which would justify the calling of a second session instead of finishing up the business of the house in resumed meetings of the same session which had been adjourned. The introduction of a second budget would at least have provided the opportunity to remove some of those taxes which have proved to be unnecessary, and to deal with the heavy and improper overtaxation which is now taking place.
This is the third successive year in which we have had a second session. A second session does not merely call for the payment of additional indemnities to the members. It calls for very large payments for the maintenance of those facilities that are required md of services that are needed for the continuance of parliament during the time it sits. In 1949 a fall session became necessary after the business of the house had been abruptly terminated at a time when the government decided, and decided correctly, that it was a good time for them to call an election, no matter how much public money was wasted by failing to complete the session which was already far advanced in its business. Nevertheless, under our parliamentary procedure, following that election a fall session did become necessary.
In the opinion of the government a special session became necessary in the late summer of last year. The regular session had prorogued in the usual way. Because of its unfortunate handling of the threatened railway strike, a situation had arisen which the government decided could only be dealt with

The Address-Mr. Drew by new legislation. Having regard to the course which the government had decided to follow, undoubtedly a short special session had become necessary.
No such situation arose this year. The speech from the throne delivered to this house at the beginning of the regular session this year adequately covered all possible legislation which will come before us, and provided the opportunity to deal with every subject we shall now be called upon to discuss. Not even the flimsy excuse that a new budget was necessary to provide the method of contribution and the complementary government financial arrangements necessary for the introduction of universal old age pensions can possibly be put forward in view of the fact that we are now informed that there is to be no budget. No matter what strong and obvious arguments there are against a second session of this kind, there might at least be some slight appearance of justification if the introduction of a second budget had provided the opportunity to review those unnecessary and inflationary taxes which were forced through this house last spring, and also to correct the serious miscalculation by which this government had already overtaxed the people of Canada by $500 million during the first five months of the new fiscal year.
There is another and very serious aspect to such a situation which it seems to me should be very much before the members of this house at this time. Parliament has been called together in a new session with every indication that it is to run its full course within the current year; yet, by the device of not introducing a budget, the government will have denied to the members the opportunity to discuss the different departments of government with the opportunity to obtain information which is afforded when each department is called on the motion to go into supply. A government which has already gone so far in denying to the members their long established rights and duties as the elected representatives of the people asks us on this occasion to approve a speech from the throne without any subsequent opportunity to deal v.'ith the business of parliament in the manner which has long been the established procedure in this house.
I can only express the hope that the Prime Minister (Mr. St. Laurent) will give us some assurance this afternoon that if the government is not prepared to reconsider its decision to introduce no budget during this session, with the resulting opportunity to discuss the affairs of each department, opportunities for such discussion will be provided by making
way for motions introduced by the opposition to produce that result. That is the practice which has long been found satisfactory at Westminster, where motions by the opposition are afforded a fixed date for consideration where those deal with major matters of public concern.
Obviously if this house is to fulfil its first duty at this time it will discuss, in much more minute detail than ever before, the present state of our defence forces and the actual position in which we find ourselves after the immense expenditures which have already been made on national defence. After an expenditure of more than $3 billion since our rearmament program began, we have surprisingly little in the way of first-line forces in being, ready to go into action. So far as our only possible enemy is concerned, it is not the glowing statements of the Department of National Defence that are going to matter; it is how many units of every branch of the service are ready to take the field.
Having regard to the repeated statements that we are now entering the most critical period of tension, and the evidence we read and hear supports that statement all too firmly, the state of our defence forces should be the first concern of every member of this house. Those Canadian forces which have gone into action on land, at sea or in the air have carried forward in the very highest measure those great traditions of military service. On the distant battlefields of Korea, imperishable pages in the history of valour and sacrifice have been written by the men of regiments which carry famous names- names made famous in earlier engagements when their fathers and their brothers took part in the battle for freedom. Canadian naval units have taken a very distinguished part in the operations in the western Pacific. The Royal Canadian Air Force has performed the tasks assigned to it with efficiency and great credit to those engaged.
This does not mean, that we have yet undertaken our share of the tasks undertaken by the United Nations. If we were to go on spending as much as we have already spent for what has actually been accomplished, then in the unhappy event that we were called upon for large-scale operation we would bankrupt ourselves overnight. If this is going to be a long-term program, then in terms of simple arithmetic we must calculate what forces would be required in the event of that major disaster, and then ascertain what it would cost, in relation to the moneys we have been spending to produce the result, or lack of it, which we have already seen.

The over-all disproportion between expenditure and result can be illustrated in one case in this simple manner. During the current year Canadian taxpayers will be called upon to pay substantially more in taxes than they did during any year of the last world war when we had more than a million men and women under arms. What are we getting for it? That is what we have a right to know. That is what every member also has a duty to find out.
If as a result of the discussions during this session we can finally dispel the verbal smoke screen set up by the Department of National Defence and begin to receive statements upon which we can rely, then possibly this unnecessary second session may serve some useful purpose. Canadians have been told that we have developed the finest antitank gun in the world, that we have the world's most advanced anti-submarine vessels, that we have the world's most powerful jet engine, that we have the world's best allweather fighter, that we are ready to play our part along with the best forces from other lands to meet any threat that may come.
Canadians will be glad to claim any real achievements which Canadians have the right to claim. In two world wars Canadians have shown that in whatever service they wore uniforms there were no more efficient and effective men and women in the world. That has been proved in the air, on land and at sea. It is unworthy of their great achievements and their valour, to say nothing of their sacrifice, that the people of Canada should at any time be lulled into a state of complacent optimism by boastful statements unrelated to the facts.
Three years have passed since we were told we were starting our rearmament program. The Korean struggle is now in its sixteenth month. Where are the anti-tank guns? Where are the anti-submarine vessels? Where are the aircraft using the world's most powerful jet engines? Where are the all-weather fighters in actual service? Where are the armed forces ready to go into action for which so much money has been spent? True, we have naval units with superb personnel. That service is in fact the most advanced, although it still has many unexplainable deficiencies in equipment.
It was air power, however, that was to be the core of our defence effort. Half of our expenditure was to be on that branch of the service. What have we in actual fighting squadrons today? When the time comes for teams to play in any league, it is the teams that can play that really count, and not the teams that are still being talked about. In a
The Address-Mr. Drew recent series of responsible and, I believe, unchallengeable articles appearing in one of the most reliable newspapers in this country, it was stated unequivocally by their military writer-and he is an exceedingly competent military writer-that as of October 1 there are only two fighter squadrons ready to go into action.
The situation in regard to the land forces is equally uncertain. Figures of recruiting mean very little in themselves. They mean next to nothing in the case of the reserve forces unless we know how many of those enlisting actually trained at camp during the year. There again one of the great difficulties, in understanding what the situation is, is to be able to interpret at any particular time the explanations given by the Department of National Defence. As a reason for not using the highly-trained airborne brigade at the time we were called upon to accept a share of the responsibility in Korea, we were told in this house-and in that way the people of Canada were told-that the defence requirements of the north made it unwise to send the airborne brigade out of Canada. Now at a time when the dangers have certainly not diminished, the airborne brigade is being sent out of Canada with no trained airborne brigade to take its place. If the explanation for not sending the airborne brigade was valid in the first place, what is the reason that we do not need a trained airborne brigade at this time? It is such contradictions as these that make it difficult for the members of this house and for the people of Canada to know what is fact and what is fancy.
These are only some of the reasons why there should be the most detailed and comprehensive examination of the real state of our defence forces. It is to build up those forces that the bulk of the heavy taxes now being collected by the government are to be used. The speech from the throne indicates that an opportunity will be afforded to discuss national defence early in the session. It has been indicated by the statement in the speech from the throne that measures will be placed before the house dealing with the dispatch of the 27th brigade to Europe, although that should-and I hope it will-provide an opportunity for the most detailed discussion of national defence. I have raised this subject today because I do not think that the examination of this matter should wait for any future date when legislation limited to a particular purpose will be before the house. Once again I make the request that without waiting for the termination of this debate, a committee of this house be set up to examine defence expenditures and all related
26	HOUSE OF
The Address-Mr. Drew matters. The exceedingly limited results obtained from the enormous sums already spent surely leave no further doubt that a committee should be empowered to inquire into defence expenditures so that the elected representatives of the people-and they are the ones to have the responsibility-may have reliable information as to the results we are getting from the huge expenditures that are being made.
One thing about which the speech from the throne is strangely silent is the subject of veterans' pensions. When I raised this subject on June 30, the day on which we knew that we were going to adjourn until October, this exchange took place, as reported at page 4885 of Hansard:


George Alexander Drew: . . . I would ask the minister to dispose ot this matter by giving us an undertaking that when we meet in October he will take the proper steps to introduce legislation that will provide for a uniform over-all percentage increase to the veterans consistent with the increased cost of living.
The Minister of Veterans Affairs (Mr. Lapointe), after saying that he could not bind the government by his statement, then said:
I did state that the recommendations of the committee, which included the subject matter mentioned by the leader of the opposition, had been put before the government and will be considered by the government.
In view of that assurance that they were to be considered by the government, then if the government has any intention of dealing with -his subject we certainly had every reason to expect that the speech from the throne would include an indication of what the government intends to do. I hope the absence of any reference to this subject does not close the door to further consideration of a matter that must be one of major concern to every member of this house.
At a time when the government, at long last, is finally agreeing to remove the means test in the case of old age pensioners of 70 or over, the distasteful and unfair means test has been applied to veterans before those in needy circumstances can receive some adjustment for the loss of buying power through inflation. An adequate basic pension is a matter of right, not of charity. Pensions are not paid to every veteran on the same basis. Pensions are paid on a basis that is in accord with the degree of their injury or disability. That being so, if there is any part of the Canadian population which is entitled to an adjustment to meet a loss in dollar value through inflation it is those pensioners who, by their unselfish service to the country, resulting in their disability, are so much in need of a basic pension adjusted adequately to living costs today.

The present situation must bring a feeling of humiliation to every member of this house who is prepared to countenance such an intolerable attitude toward those who have the highest claim upon our consideration. The treatment of our veterans and the refusal to make an over-all adjustment of pensions in their case related to the cost of living is in striking contrast to what the government has done in other cases and what is obviously the only real purpose of a second session of this house. I hope that the absence of any reference to this in the speech from the throne does not indicate that the government is unwilling to correct this situation.
I do not propose to discuss in detail those subjects referred to in the speech from the throne which can obviously be more satisfactorily discussed when the government measures dealing with them are before us. As I said before, nothing new has been raised in the speech from the throne. In fact, very little information has been given in regard to the subjects which we all knew we would be dealing with.
There is one subject, however, which although rather casually dealt with in the speech from the throne is by far the most urgent and important subject, along with national defence, which the members of this house will be called upon to discuss. It goes hand in hand with national defence, involves our real capacity to maintain our defence program, and is, in fact, part and parcel of the problem of defence itself. It is referred to in these words in the speech from the throne:
The concern of our people over the rising cost of living resulting from international and domestic inflationary pressure is fully shared by the government. Every measure will be taken which my ministers believe will be effective in counteracting inflation without impairing our free institutions.


Some hon. Members:: Hear, hear.


George Alexander Drew: I am encouraged to hope that the hon. members who say "hear, hear" will be prepared for that very reason to support the amendment which I will introduce at the end of these remarks.
The anti-inflationary measures already in force have checked the upward trend of prices of goods and services affected by their operation.
I might say I am of course still quoting from the speech from the throne, because otherwise I am sure that many hon. members would wonder where that statement had come from.
The fact that the concern of the Canadian people about inflation is fully shared by the government will I hope bring some measure of reassurance to many Canadians who had been given the contrary impression by recent

statements made on behalf of the government. I trust there may be some belated hope in the statement that the government intends to take every measure that will be effective in counteracting inflation without impairing our free institutions. Mr. Speaker, it is most significant that the government itself says effective measures will be taken and does not for a moment imply that they have been taken.
Most certainly we all wish to conserve our free institutions. The thing that would be most likely of all to destroy our free institutions would be inflation itself, if it is not brought under control. Now that the government indicates that it intends to do something to protect our free institutions by effective measures to combat inflation, the question naturally arises, When and how?
There is no subject calling for more urgent consideration by the members of this house than that of inflation. Even if our defence efforts are brought into some sort of order and expenditures on defence properly supervised and allocated, our efforts along that line can be defeated unless the dreadful economic disease of inflation is finally checked. I borrow the words of the Prime Minister himself when I say that inflation in this country has already reached calamitous proportions.
When we introduced an amendment to the motion adopting the speech from the throne on September 1, 1950, more than thirteen months ago, we expressed regret that the government had failed to take steps to deal with inflation and the rapidly rising cost of living. Discussing that motion and referring to what I had said about the dangers of inflation at that time, the Prime Minister indicated his own belief that it would be difficult for us to have less inflation than the United States, an opinion not commonly shared by all members of this house. But holding that opinion he then used these words, as found in Hansard at page 118 of that date:
So far it has not outrun anything that has taken place south of the border.
It might. It would be disastrous if it did. It would be calamitous if it did; and we certainly must do everything within the ingenuity of man to prevent it.
I accept these words of the Prime Minister in so far as the extent of the seriousness of our inflation outrunning that of United States is concerned. Now inflation in Canada has outrun anything that has taken place south of the border. It has outrun it more than the cost of living index really indicates, because, as all hon. members are aware, these things which are not sufficiently regarded as basic necessities to be included
The Address-Mr. Drew in the cost of living index do not show the same difference as do some of these other things which most people regard practically as necessities, but which still are outside of the articles included in the cost of living index itself. If these other things were included the disparity between our cost of living and that of the United States would be still greater than is shown by the cost of living index. The Prime Minister said on September 1 last year that it would be disastrous, that it would be calamitous if that happened. It has happened, and therefore by his own definition we are now called upon to discuss what should be done about a calamity with which we are already confronted.
In the same speech the Prime Minister said on September 1 last year:
I can say to the house at this time that we are not planning at this session to ask parliament for any enabling legislation which would empower us to impose a general system of controls on wages and prices.
In accordance with that assurance the legislation which was introduced did place some limit upon what the government could do by order in council.
Last spring, however, at the regular session, new legislation was introduced replacing that which had been adopted last September. The explanation given for introducing that new legislation was that the time had now come when the emergency made it necessary for the government to have power to introduce such controls at the time it deemed them advisable. I think this should be remembered at a time when the government seems to be claiming some measure of virtue in the fact that it has refused to adopt controls at the upper level as well as the bottom level.
Now this being so we may well ask ourselves why such wide powers were needed, and why it was that this government, with the support of its followers, obtained the most sweeping and arbitrary powers ever possessed by any democratic government in time of general peace.
In recent speeches on this subject different members of the government have sought to convey the impression that we were trying to convince the public that there was some easy way to deal with inflation. They claim that we have attributed some magic powers to price control. That was precisely what we did not say. We said the very contrary. Since some of the statements which have been made on this subject bear so little resemblance to what actually was said, I should like to place on record once again part of

The Address-Mr. Drew what I said on April 9 of this year, as reported at page 1730 in Hansard. I said this:
It is only natural that in the discussion of a subject of this kind there should be some tendency to oversimplify the issue and suggest that one particular remedy or another will solve the whole problem. At no time in this house or outside it have I ever suggested that this problem can be overcome by any one simple solution. On the contrary I have contended that there is no simple solution, that there are many aspects to this problem.
Then, after discussing the subject further, I went on to say this:
There are a number of things that we have urged the government to do:
First, substantially reduce all non-defence expenditures by the government.
Second, encourage the production of every line of civilian requirements so that increased production of these things may ease the strain and pressures which cause inflation.
Third, encourage immigration which will bring to our country vigorous people with the skill and character which will make them useful members of the Canadian community.
Fourth, remove all restrictions which will discourage the building of new houses urgently needed for the steady increase of population by our own normal growth and by immigration.
Fifth, take effective steps to make sure we get full value for every dollar spent on defence.
Sixth, restrain inflation through the control of currency by the Bank of Canada, and by other monetary controls available to the bank under the act which gives it its powers.
Seventh, introduce emergency controls immediately to the extent that they are required to deal effectively with the cost of living and inflation.
In the explanation which I gave of those recommendations I pointed out that in our opinion production was the one long-term answer to inflation, but that the first and most direct way to tackle this problem was for the government itself to economize and to reduce non-defence expenditures.
In view of the fact that the Prime Minister stated more than a year ago, when this subject was under discussion, that it would be a calamity if inflation in this country exceeded that in the United States, and that everything within the ingenuity of man must be done to prevent it, it is necessary to point out to the government that the ingenuity of this government was not sufficient to prevent it, and that obviously there are things which should be done immediately under the immense powers which they obtained from parliament to deal with the calamity which is already upon us.
It is not enough to be told by the government-and the speech from the throne is the statement of the government

that the government does share the concern of the people of Canada about inflation. We should be told, and through the reports of the proceedings in this house the people of Canada should be told this afternoon, what the ingenuity of this
government does suggest as an effective way of dealing with this calamity at this time.
It would be incorrect to say that the government has done nothing about inflation. It has done a number of things. Most of them have been disastrously wrong; some of them have greatly aggravated the situation. As an example, the government increased the sales tax by 25 per cent last spring and put a special excise tax on a number of articles that are real necessities. We pointed out at that time that those taxes were unnecessary; and that, as they were increased hidden taxes on things which people needed to buy, the taxes were restrictive, unfair and inflationary. It will be recalled that by arguments and by resolutions as well we sought to prevent the imposition of those unfair and unnecessary taxes.
It will be recalled by hon. members who were present that the Minister of Finance (Mr. Abbott) set up his estimates and was unwilling to concede that his budget would really provide more than was necessary for the purposes set out by the department. Now we have ample proof that those taxes were not only unfair but, to a substantial extent, were unnecessary. The $500 million surplus in five months demonstrates how unnecessary they were and how little reliance hon. members can place upon the estimates presented by the government. Even though no provision has yet been made for any procedure which would repeal those taxes, I trust that the government will take steps to repeal them at this session and relieve the inflationary pressures which they create, as well as the hardship they have produced to consumers of all those things affected by them.
Now, the one answer given, when the attention of the government is called to this enormous surplus in five months, is that it is a wise thing to be able to pay off our debts. That is always sound, at the proper time; but there are things which parliament should be asked to approve. If it is the intention of the government to tax the people for the purpose of paying off debts, then that should be indicated to hon. members of the house at the time the budget is placed before them. And it is not only not good practice, but it is contrary to every principle of parliamentary procedure and every recognized principle of government, if the Minister of Finance has, in fact, intentionally overbudgeted for purposes which he did not disclose to members of the house. The $500 million is there as evidence of the extent to which this government has taken out of the

people's pockets dollars which were not needed, in addition to the very large number of dollars it needed for the tasks which lie before us.
The government has also restricted credit. Certainly some limitation on the pumping of new currency into circulation by the government was urgently needed; but that was a very different thing from suddenly reversing the whole course of government policy and imposing at the same time extremely severe credit controls on purchasers, and also severely limiting the bank credit of manufacturers, distributors and retailers providing those things upon which the purchasing power of the public had also been so greatly reduced. It was a double squeeze; it was a squeeze on those producing and on those receiving. While the same restrictions on credit do not apply to those purchasing food, they did apply to the farmers, in so far as the extension of credit to the farmers of this country at this time was concerned.
This double squeeze had other consequences, in addition to the difficulties it presented to the people who needed those things. It has also had a very serious effect upon building new homes, and the furnishing of homes, both new and old. The credit restrictions, at the level at which they were imposed, and under the terms under which they were imposed, did place restrictions upon very real necessities such as washing machines, refrigerators, automobiles and other electrical and mechanical equipment of that kind. It made it extremely difficult for many people to proceed with their building. In certain statements made on behalf of the government recently I have noticed references which conveyed the impression that automobiles were luxury equipment. In a great many places in this country today automobiles have become an absolute necessity if people are going to get to their work. There is no other way by which they can get to the jobs which need to be done in the interests of the whole defence production of this country. When we are emphasizing the desirability of electrifying homes both urban and rural it hardly seems to be the time to make it difficult to furnish these homes with the one means of heat and power that most of these homes have available.
What is a more important proposition in its immediate effect is that it has created very serious areas of unemployment throughout this country. This is a positive result that the government certainly has achieved. I am not suggesting for one moment that this was the result the government intended, but a government which has been pumping inflation
The Address-Mr. Drew into this country through currency and otherwise for years suddenly reversed its course and went to the extreme the other way, and we are feeling the consequences right across Canada today. What is the government's answer to this situation? The government tells the people that they must produce more to meet inflation. What is the use of telling a worker in Windsor, Vancouver, or any other city in Canada today where he is now out of work that he must produce more? What chance has he to produce more? He has not even got a job at the moment in the place where he has been working. What is the use of telling him that inflation is the result of too many dollars chasing too few goods? They know that in their particular occupations there are too many goods waiting for dollars that are not at the moment available.
While there are areas of unemployment throughout the whole of Canada as a result of the government's action, it is most acute in Windsor, and what has happened there illustrates in a very forceful way what is happening in many other parts of Canada now. In Windsor of course, with its great concentration of factories producing automobiles and automobile parts, they have felt the impact of this restraint more severely perhaps than in any other one part of Canada. What answer does the government give to their problem? What hope do they offer people affected in that way? They make the suggestion that they will be generous enough to ease the facilities provided at the border so that these people who are out of work in Canada can leave the country to go to the United States. That is the solution they offer to people who are out of work as a direct result of the misapplied policy which this government has adopted.
No matter how little this may affect any other part of Canada, it can surely be a source of very little pride or satisfaction to any Canadian that the best suggestion the government can make to those it has put out of work is to tell them that the solution is to leave their own country. We have been told that we need more people in Canada. I believe we do. The minister of immigration says that we do. If this is the best the government of Canada can do to deal with the hardship resulting from its own action, then the least that can be said is that it illustrates very forcefully the conflicting ideas within the government itself and the state of utter confusion in which it finds itself in tackling the most serious domestic problem we face.
If anything could more emphatically emphasize the necessity for a removal of these restrictions, it is the shameful situation in regard to housing which has resulted from
30	HOUSE OF
The Address-Mr. Drew the severity of the credit restrictions imposed. The minister of immigration announces with pride that within the first eight months of this year more immigrants have come to Canada than in any similar period since the war, and yet at the very same time we see a steady and alarming reduction in the construction of new houses. If there is one place above all others where all artificial barriers should be removed, it is in the case of housing. We are desperately short of houses for the people already here, never more desperately short of them than we are right at this hour. They are needed for the people now coming here and for those we are inviting to come. We have the raw materials in Canada. We have the skill. Additional workers are available as a result of the unemployment which the government has created and other workers are coming to this country. Many thousands are being brought here by the government itself. What is necessary therefore is that the government remove the obstructions it has raised, change the mortgage provisions under the National Housing Act, and give the green light to a real and comprehensive building program of new houses throughout the whole of Canada.
The Minister of Finance has a formula for fighting inflation. It sounds good. It gets back to old and earthy principles. Speaking to the annual convention of one of our most important women's organizations in Montreal not long ago he emphasized the importance of saving as one way of fighting inflation. He said that the amount might not seem large in any particular case but that an accumulation of many little savings would produce a very real result.
Is it too much to hope that in this case the Minister of Finance was speaking on behalf of the government and that this does represent a change in the attitude of the government? After all, that is what we have been seeking to impress upon the government in regard to government expenditures for some time. On each occasion that we have urged that a committee of this house or a commission be set up to examine the cost of government and the business organization of government itself, we have been asked to say where the savings would be made. We have pointed out where many savings could be made. We have pointed out-and I point out again-that millions of dollars could be saved simply by the device of closing down on the unnecessary propaganda organizations maintained by the government and letting the government rely on what it actually does instead of what its paid propaganda says that it does.

I doubt if there is a single member of this house, in his contacts around this building and elsewhere throughout Canada, who does not know some place where some saving could be made. Possibly it might be relatively small. That is the very thing the Minister of Finance has pointed out, but with a multitude of government activities, such a multitude of activities as would never be known by the careful housewife, the point which the Minister of Finance so aptly made at Montreal surely does apply with immense force to the government itself.
Even if the individual items of the saving here and the saving there are small in proportion to the billions spent, even with a government that can say, what does a million matter, the accumulation of many savings in many departments of government would undoubtedly reach a very substantial figure. That would be tackling inflation at its very base. Under the unusual procedure adopted for this session it may not be possible to introduce a motion which would once again give the members an opportunity to vote on the question of setting up a committee to inquire into the cost and operation of government. But if the Minister of Finance thought his advice was good when it was directed to those who are called upon day by day to exercise the utmost care in their own spending, then it should be many times as good when directed to an organization which spends such enormous sums of the people's money, and in this case the advice does not have to go to somebody else. It can be accepted by the person who has put it forward.
If the government believes that saving will help to fight inflation, then it must believe that saving of public money by the government itself will be effective in fighting inflation. For that reason I do hope that in the face of such a calamity, to use the Prime Minister's own word for it, the government will be ready to follow a course which would be followed by any business of any substantial size which hoped to keep in operation in this country in these difficult days.
The Minister of Finance has every reason to know that in these particular days those companies Which have to adjust themselves to the economic pressures of the moment are examining every single department of their businesses to see whether even the most, efficient staffs have permitted duplications and inefficiencies to creep in which waste some unnecessary money, perhaps just the small savings such as he has mentioned.
The government has also placed great emphasis on production as the answer to-inflation. In that I am sure the government

is sound. But if the government believes that production really is the answer to inflation, then I hope it will immediately take steps to encourage production instead of discouraging it. I hope that as a first step it will announce that it is prepared to introduce legislation to repeal the 25 per cent increase in the sales tax and the wholly unnecessary increases in excise tax which were introduced last spring. Certainly the government can do that.
If the government believes that inflation threatens our defence effort, and more than one member of the government has said that it does, then I hope the government will take the necessary steps to make sure that every dollar spent on defence produces the best possible results. The way to do that is clear. May I repeat what I said before. The best way to assure effective defence production is to set up a committee to examine defence expenditures and provide for the first time some reliable and understandable information for hon. members of this house and the people of Canada about what is happening to our defence dollars.
If we are going to make those little savings which the Minister of Finance now recognizes as being so important the government should accede to the request previously made and which has been accepted in other jurisdictions and appoint a committee or commission to examine the business of government and the cost of operation of government. The minister himself should welcome the advice of independent experts as to ways of preventing duplication and unnecessary complicated services.
The government may have some other plan for dealing with this calamity. I hope it has. Unless inflation is tackled and overcome the consequences are far too serious to contemplate. The main thing that hon. members of this house should seek is positive action. That responsibility rests upon every member of this house, no matter to what party he belongs. If there is in fact some method which has not yet been employed, let us know what the method is. Confidence that this situation is going to be faced is almost as important as evidence that steps have already been taken. The situation is so serious that I am confident the government will receive support for any sound measures it may now put forward which show any real hope of tackling this problem effectively at this time.
I have used the word calamity. I hope there is no hon. member of this house who considers that the inflation which has already taken place is not already a real calamity for many thousands of Canadians. I am
The Address-Mr. Drew indebted to the Prime Minister for the particular word; but call it what you will the present value of the dollar in actual purchasing power has placed our disabled pensioners, our disabled veterans, our old age pensioners, our blind pensioners, our industrial pensioners, those who have invested in endowment policies for their old age, those who have sought to protect themselves by investing in bonds, and those with low incomes, in a position where they simply do not know today how to make ends meet.
If any member of the government wants to know what is happening all he needs to do is speak to the bank manager in any of the smaller banks who is dealing directly with people in this country who are receiving smaller incomes. I am almost certain that any inquirer will be told that one of the great concerns of the banks today is the extent to which people are encroaching upon their savings and pledging the holdings which they were putting aside for their own protection in an effort to meet the necessary demands of daily life at this time.
We have all acclaimed the fact that at last there is to be a universal pension for all our people reaching 70 years of age. Even before the legislation is passed we are bound to recognize that the $40 a month which will be paid is not worth much more than $20 a month compared with pre-war dollars when $20 a month was not thought to be sufficient by anyone. That is a calamity in itself.
Even if our hopes are realized and the increasing strength of the free nations does prevent a general war, this is likely to be a long and sustained struggle for peace during which we must be constantly arming and renewing our arms. Our ability to maintain that effort and therefore our ability to preserve peace depends on the extent to which we avoid the ravages of inflation.
The urgent, critical and compelling task before parliament, not just the government alone, is to protect the economy upon which our whole effort for self-preservation is going to depend. It is of equally great importance, and closer to us in human terms, that those who are in no strategic position to protect themselves against the heartbreaking effects of inflation, and most certainly not in a position to take advantage of it as some are, will be given not only immediate relief but also some ground for confidence that they will be able to meet the simple demands of their daily lives.
In addition to the very real hardship which is already being suffered and the increasing hardship which would accompany any further rise in the cost of living, there is the fact that in this country, where most people

The Address-Mr. Drew believe that success through free enterprise should be encouraged, we would find the seeds of that distrust between people of different occupations which has been the unhappy heritage of conditions in some older nations when inflation brings hardship to most but advantage to the few who are in a strategic position to take advantage of inflation itself. This problem should not be allowed to get any further out of hand, nor should it be allowed to become a bogey. It can and must be tackled or we face a major defeat in this long struggle in which we are now engaged.
Since production is the answer and since no country has greater undeveloped resources to put into production than Canada, it can be said without any careless optimism that no country in the world is better able to fight the battle against inflation than we are in Canada. It is with confidence that this is so that I am going to move a motion which I hope on this occasion will be dealt with not upon the rigid basis of division between parties in this house.


Some hon. Members:: Oh, oh.


George Alexander Drew: There are those who will be interested to know that the effects of inflation in this country are a laughing matter to some members of this house.
It is with that confident belief, and with the conviction that all else depends upon our successfully tackling this problem, that I propose to introduce an amendment which will simply call upon the government to take immediate action to deal effectively with this problem. Do not let anyone say simply that something needs to be done. The speech from the throne says so, and it says that the government is going to do things. I am asking the members of this house, therefore, to say that they should be done without further delay. The motion has been framed in words which make it possible for every member of this house to ask for such action without being called upon to censure the government for its failure to deal effectively with this problem. So often members say, "Oh, I would have voted for that amendment if there had not been included in it a number of details with which I do not agree, although I agree with the main purpose of the motion." The motion I am about to move leaves no such possibility, and I hope that the members will vote upon it recognizing that fact. I hope that the members of all parties in this house who believe that something effective should be done will support the motion. It carefully avoids all other controversial issues, and asks the members for a vote on no other question than whether or not the government will now tackle the

problem of inflation in a way which will assure the general welfare and security of all Canadians.
I therefore move, Mr. Speaker, seconded by the member for Lake Centre (Mr. Diefen-baker), that the following be added to the
address:
We respectfully represent to Your Excellency that in the opinion of this house adequate steps should be taken to combat inflation and deal effectively with the high cost of living.


Right Hon. L. S. St. Laurent (Prime Minister):: Mr. Speaker, it is indeed a pleasure for me to join the leader of the opposition (Mr. Drew) in extending the usual congratulations to the members who moved and seconded the address in reply to the speech from the throne. The hon. member for Beauharnois (Mr. Cauchon) and the hon. member for Yukon-Mackenzie River (Mr. Simmons) are among the more recent members of this house, having come into parliament for the first time in the last general election. I believe we can all say that as their colleagues we are proud, and I believe their constituents have reason to be proud, of the admirable way in which they conducted themselves in moving and seconding the address. The speeches reflect credit upon them and upon those who sent them here, as well as upon this House of Commons.
The hon. member for Beauharnois (Mr. Cauchon) spoke both in French and in English. Those of us who had the privilege of following all of his remarks heard, I think it is fair to say, an address of high merit, although I am sure that many of you felt as I did that he was overly generous in his references to the Prime Minister. All I can promise him in that regard is that the Prime Minister will continue to do his best, and trust that his efforts may not be too disappointing.
(Translation):
The hon. member for Beauharnois (Mr. Cauchon) did not have to wait until the 1949 general elections to be entrusted by his fellow citizens with public office.
Originally in his capacity as alderman, then as mayor of Valleyfield, and also as vice-president of the Union of Municipalities of the province of Quebec, he had already acquired an enviable reputation for devoted and useful public-mindedness. I am convinced that the experience and knowledge gained by him in the municipal field constitute a factor of success which we may put to good use here in the discussion and solution of the various federal problems.

I believe the citizens of the constituency of Beauharnois can be proud of the member they chose in 1949 to represent them in this house.
(Text):
Those of us, and there are many, who know something of the background of the hon. member for Yukon-Mackenzie River, Canada's largest and still most remote constituency, were not surprised to hear him extol the part of the country from which he comes, its rugged beauty and its rich resources. With the exception of the years when he served overseas in the Canadian expeditionary forces in world war I, he has spent most of his life in the Yukon Territory. Before running for parliament in 1949 he was the collector of national revenue, immigration inspector, magistrate, judge of the juvenile court, and had been president of the Whitehorse board of trade and member of the Whitehorse hospital board. The hon. member made a speech which I feel sure we all listened to with interest and, I may add, with gratification. We, too, believe in the future of our north country. We all feel that it is fortunate for the people of the whole of Canada that their representatives in parliament continue to be men and women who not only have a broad grasp of current public affairs, but are men and women of vision who have confidence in the future of our country. With this in mind I repeat I am very happy to extend sincere congratulations to the mover and the seconder of the address.
We have also listened with interest to the speech by the leader of the opposition. I am not sure that, in spite of what he has said, he has succeeded in making his motion anything but a motion of no confidence. That, Mr. Speaker, will be for you to consider. If it is not a motion of no confidence it probably is not in order at this time. I believe it would be unfortunate to have the discussion of the matter which occupied a substantial portion of the hon. member's time, that of inflation, dealt with in the context of a motion of no confidence, because it so happens that this is a matter which is giving us all grave concern. There are many of the hon. member's friends who, for other reasons, perhaps, do not choose very often to assert confidence in this government, but who feel that the policies we have been following are in fact the right policies at this time. I must confess that there are many of our friends on this side, and in that other corner of the house near Mr. Speaker, disturbed at the fact that the government has not been able to devise any more effective measures of combating inflation than those which have been so far proposed to parliament.
The Address-Mr. St. Laurent
This is not a matter upon which there have been the usual divisions between those who support one party or another, those who support the C.C.F. party or the Social Credit party; but it is a situation in which all of us feel the pinch of these higher prices and none of us likes it. Now, with regard to those who have been suggesting that the government's refusal to introduce direct price controls is a matter of stubbornness or a surrender to vested interests, let me say this. I do not often have the opportunity to go to the Globe and Mail for authority for any of the positions taken by the government. But it so happens that on September 27 last, in an article which is entitled "Cold Common Sense," the Globe and Mail-which I am sure for that reason has not lost its liking for the leader of the opposition-had this to say:
It was not a statement of policy that Finance Minister Abbott made this week in his radio talk on price control. It was a statement of fact. He was not merely saying that the federal government would not control prices. He was saying-and he was perfectly right-that the federal government could not control prices. Neither could the Conservatives if they were in office. And neither could the C.C.F. Nobody could.
The article went on to say:
On the face of it, it is most unfair and unreasonable to suggest . . . that the government's refusal to introduce price control is a matter of stubbornness, or a surrender to vested interests. Such criticism not only misleads the public, but misrepresents the government. The government's refusal is a matter of cold common sense. It is taking the only rational attitude there is to take. It will not attempt to do what cannot be done. It will not embark on a program which at this time and under these circumstances can only succeed by destroying the last vestige of personal liberty.
With respect to the assertion that the Conservatives, if they were in office, could not do it, and the C.C.F. could not do it, they
say:
Mr. Abbott rightly drew attention to the British experience. That country has a highly organized system of price controls, subsidies and rationing. And what has happened? Prices have risen faster in Britain, during the last six months, than they have risen either in Canada or the United States. Government leaders admit that the system, long overburdened, has broken down.
I do not want to criticize what has been attempted elsewhere, but I think we are entitled to examine the results that have been achieved elsewhere and to determine, in the lights that are ours, whether we could expect to realize from the same methods better results than others-who, I am sure, have been operating with as great ingenuity as we could display and with as great devotion to the public weal as we could display- have found it possible to achieve. That is the situation in the United Kingdom, and it has been the situation for many months.

The Address-Mr. St. Laurent
I do not know how many hon. members have given themselves the benefit of the interesting and valuable study that would come from the perusal of this discussion pamphlet issued by the Labour party last January and which is entitled "This Cost of Living Business", in which they attempt to explain why it is that they have not been able to keep prices down in spite of their rationing, their direct controls and the other methods they have endeavoured to employ.
From page 9 of the pamphlet I cite this paragraph:
One big element in the cost of living, the prices we have to pay for imports, is outside the control of the government.
That is true here as well as: it is in the United Kingdom; and in this country there is not only the prices we have to pay for the goods we import but the prices our Canadian producers can obtain for the goods they export, unless we prevent them from exporting them and force them to take from the Canadian market for their labours less than they can obtain by exporting. The pamphlet goes on to say:
Britain has to import about half its food and many raw materials. Both food and raw materials are far more expensive than before the war. And prices have taken another steep rise since the outbreak of war in Korea.
Then a little further down:
Dearer imports are not due only to the war. There are other, more fundamental causes. Standards of living in many countries are higher now than they were before the war and as a result the great food-producing countries are eating more of their own food. There is, consequently, less for importing countries like Britain.
Then at page 13:
About 60 per cent of the value of the nation's output is the cost of wages and salaries. Changes in wages and salaries therefore have a profound effect on prices unless the higher wages are matched by higher productivity, or are met from profits.
With respect to profits they give this explanation:
Profits cater for the creation of reserves to pay for expansion and re-equipment and the additional money manufacturers want to pay dividends to their shareholders. The more money firms put aside to develop new methods of production, the more consumers have to pay now for goods. But new equipment and better laid-out factories mean more efficient production, lower costs, and the possibility of lower prices in the long run. If the money to pay for this were not raised from profits it would have to be raised in some other way.
On page 14 we find this:
Can we, then, cut profits?
First, it has been explained that, to the extent that profit makes provision for re-equipment and new building, it is an element in increasing efficiency in industry which, in the long run, should make price reduction possible. This leaves then that part of the profit which is distributed to shareholders.
A reduction in distributed profits could do little to reduce prices.
fMr. St. Laurent.]
That is not my statement. It is the statement of the Labour party in England after years of experience with their controls over the industry of the United Kingdom.
Then they go on to say, as to profits:
They are a very small part of the cost of any item so, although there are very many excellent reasons for dividend limitation and profit control, their effectiveness as a means of reducing the cost of living is not one of them.
On the same page they explain what inflation is:
Inflation is an increase in spending money without a corresponding increase in the supply of goods and services. The effects of inflation are higher prices or a shortage of goods, or both. A country which has full employment must face the problem of inflation. When there is plenty of work for everyone, there is more money to spend. The more money there is to spend, the more demand there is for goods. Prices tend to go up, and goods sell out quickly. If incomes go up faster than prices or production, there is even more competition to buy goods, prices rise again, and there is pressure for further income increases. The cost of living then begins to rise really fast.
Then they go on to make this statement which is a truism for all of us:
The first and most obvious thing to do in these circumstances is to increase production and productivity as outlined previously. While this is being done the other main anti-inflationary safeguard is to restrict the supply of money available so that it matches the amount of goods and services.
If you want two things to be equal in weight and one is heavier than the other, you have to lighten the one or increase the weight of the other. There are several ways of doing this. One is to put a stop to increases in wages, salaries and profits. Another is to tax away the surplus money. That is not a popular way, but the Labour party in the United Kingdom recognizes, as do all economists, that it is an effective way. They go on to say that they have used these ways, and at the same time the government has taken more from the people in taxes than it has spent on running the country and providing the social services. This has taken money out of circulation and has reduced the inflationary pressure. They go on to say:
This looks like a paradox.
Probably it does look like a paradox.
It seems difficult to believe that higher taxes prevent prices from rising. But it is still true that the use of higher taxes and budget surpluses prevents inflation, preserves the value of our money and prevents the cost of living from getting out of control.
On page 12 they deal with the cost of distribution and with the effect of resale price fixing, and they say:
A great deal more evidence is needed before all the various aspects of the problem of distribution can be tackled.
But with respect to retail price maintenance they explain that once a merchant or manufacturer has created a demand for his goods by brand name he is in a position to

lay down conditions on which he will sell, and most branded goods are in fact offered for sale at a fixed price. On page 20 they deal with the conditions of sale that are imposed by the manufacturers and show that competition between retailers is reduced as well. They say:
If all shopkeepers have to buy at the same prices and sell at the same prices there can be no price competition, so shopkeepers have to offer more elaborate services, credit or delivery services, or chromium-plated shop fronts in order to attract customers. These things again have to be paid for and again have an effect on the cost of living.
Then they go on to explain that the Labour party has promised to deal with the problem of preventing manufacturers and traders from stopping supplies to retailers who cut prices. They go on to say that when this has been done the interest of customers will depend on there being sufficient retailers enterprising enough to accept the challenge. They say that price competition is one of the most effective ways we have of counteracting the tendency of private traders who sit back and take easy profits from the country's prosperity.
Well, even on that there is no agreement between people on the basis of their allegiance to one political party or another. This problem has been carefully studied by a committee appointed to do that job, a committee composed of highly respected persons felt to be qualified to examine the problem objectively and to make a report upon it. They have done so, and that report is now before parliament, but I am sure that when any legislation based upon that report is being considered there will be arguments pro and con the probable effects of interfering with this so-called right of the producer of an article to determine the price at which it will be resold to the ultimate consumer.
I am not sure myself that that is not already contrary to provisions of the Combines Investigation Act, because the act defines a combine as a conspiracy between two or more persons to fix the resale price of commodities. As to why that should not apply to an agreement between a producer and a distributor to fix the price at which the distributor will resell the goods is a question to which I have not yet been able to find a satisfactory answer; but that act has been there for many years, and in spite of it we all know that there is a large variety of commodities for which the resale price is fixed by the producer.
Some people think that is detrimental to the public interest, some contend that it is otherwise; but it is certainly a problem which is being considered by those who are really concerned with such measures as can be effective in curbing the high prices consumers have to pay for the goods they require.
The Address-Mr. St. Laurent


John George Diefenbaker: Have there ever been any prosecutions for price fixing under the combines act?


Louis Stephen St-Laurent: I do not know of any prosecution based upon an agreement between a producer and a distributor; I do not know that any have been instituted on that aspect. It seems to have been considered that because the word "conspiracy" was used it had to do with something which, irrespective of a definition of the combines act, most people would regard as wrongful, and I do not think that there has been any recourse to the Combines Investigation Act to attempt to curb this practice of fixing resale prices when they result solely from an agreement between the producer and the distributor. Whether that should be done or not I am sure the hon. gentleman will be giving us the benefit of his views when the matter is up for consideration in the house.
Now, with respect to the situation in the United Kingdom, where the chancellor of the exchequer has recently warned that any further attempt to hold prices down by increased subsidies would require subsidies of such an extent that it would wreck the economy of the country, the fact is that with their controls, with their subsidies, which have been continued through the whole period since the cessation of hostilities, as the hon. gentlemen of the C.C.F. party think should have been done in this country, the increases in prices have been faster in the United Kingdom in the last six months for which there are reports than they have been either in the United States or in Canada.
Referring to the report issued for the six months from mid-February to mid-August -it is not exactly from the 15th of one month to the 15th of another month, as I understand it; it is a certain day in the week which may be the 13th, or the 14th, the 16th or the 17th; it is close to the middle of the month. From mid-February to mid-August, which is the latest United Kingdom figure, the increase shown in their cost of living index, which of course is not strictly comparable to ours, because it probably comprises fewer items than ours does, has- been 7-6 per cent; and in the same period, or a comparable period, from March 1 to September 1, which is the last available figure for Canada, it has been 5-6 per cent.
Now, I am not claiming any credit for that; I am just putting it before the house as one of the facts that have to be taken into consideration when attempting to formulate a policy with any expectation that it is going to be effective.
I have considerable pride in what I believe to be fact, that up to the present time this

The Address-Mr. St. Laurent government has been looked upon as frank and fair and as trying to do a good job. I do not think it would be right for us to put before the public anything we ourselves did not believe in. It is human for us to make mistakes, but they must be honest mistakes. I think it would be wrong for us to try to put into effect measures that would turn out to be mistaken, and that we ourselves did not believe in when putting them before the public. That is something this government does not intend to do.
They have not been able to do it in the United States, any more than they have been able to do it in the United Kingdom. The hon. member for Rosetown-Biggar (Mr. Coldwell), in a recent broadcast, said that they had put into effect more efficient controls-I am not using his exact words, but I hope I am correctly paraphrasing them-more efficient controls than they had in effect during most of the time during the last war. Well, that does not speak very highly for those which were in effect during the last war-if we are to judge them by their effect on prices at the present time.
There has been an assertion that the Bank of Canada admitted in its July publication that the cost of living in Canada had become higher than the cost of living in the United States. Well, that was the interpretation put upon it by the Canadian Press-"Canada's living costs higher than U.S.; Bank of Canada survey shows reversal of historic pattern". And the leader of the opposition has asserted that we now have inflation in this country to a greater degree than they have in the United States.
Well, I asked to be shown just what this Canadian Press dispatch was based upon, and I found that it was based upon a diagram of cost of living indexes where, for the first time, the Canadian curve crossed the American curve.
These cost of living indexes are based on statistics showing changes in prices; but they are not exactly the same thing as the actual cost of living. Some say that they do not reflect the whole cost of living, while others say that they do show more than the actual cost of living. That is a matter of opinion. But, whatever one's opinion may be In the matter, the fact is that the housewife does not support her family upon a cost of living index: she supports her family upon what she pays in the shops for the articles she has to buy.
Now, from a distance pastures always look green. However, I happened* to be in Washington on September 28. I had gone down to that city to confer with the President of the United States about the measure that it

might be proper to put on foot to try to bring about speedy development of the St. Lawrence waterway. Naturally, I picked up a Washington newspaper. As a matter of fact, I brought it back with me.
This paper showed the ceilings that were going into effect in the United States on their beef prices on October 1. Those are the prices in effect, with the direct controls that have been resorted to in the United! States. I am told there are others charged on the black market which go beyond these prices. These, however, are the prices authorized by government action. They dealt with retail stores, groups 1 and. 2; retail stores, groups 3 and 4, and certain small stores; and then retail stores groups 3-B and 4-B, which include supermarkets, chains and independents. This latter group has lower ceilings because it provides less service than do the other shops.
The first item shows porterhouse steak at $1.34 a pound; tenderloin, $1.81 a pound; sirloin, boneless, $1.34. Well, I do not' do the marketing myself. But I have a family, in which there are representatives of three generations, from whom I hear something about the high prices that have to be paid. I know that none of them is paying those prices.
I picked up a paper in Ottawa last week. This happened to be a copy of the Ottawa Citizen, and in it I found advertised porterhouse steak, with the cuttings taken off, at $1.05 a pound, instead of the $1.34 set out in the Washington paper. Those are the actual prices which prevail.
On another page of that issue of the Washington Post of September 28, there was a news item stating that the price of grade A milk was to be raised one cent a quart on the following Monday, with three dairies fixing the price at 23 \ cents a quart. That is for the American quart, which is about one-fifth less in volume than ours. That means that the price would be more than 28 cents for an imperial quart of milk.
I find upon inquiries made through our consular office in New York that the prices there are a little higher even than those indicated for the A & P, Safeway and Supermarkets in Washington. I found that while the retail price was 23J cents for an American quart at the A & P supermarket at 2141 Wisconsin avenue on October 2, 1951, or the equivalent of 28 cents for an imperial quart, the price prevailing on October 12 at an A & P store here in Ottawa was 19 cents for an imperial quart. It may be 20 cents now; I understand there has been a move to add an additional cent to the price. However, it was 19 cents on October 12.

Then, as to the price of bread: in Washington, for a 24-ounce loaf of white bread, sliced, the price was 19 to 21 cents. To buy it from the same firm-the A & P store-here in Ottawa, the 24-ounce loaf was 15 cents.


John George Diefenbaker: But the farmers get higher prices down there.


Louis Stephen St-Laurent: I am comparing actual prices at the present time to see whether or not, all things considered, it is proper to say that we have here in Canada a greater degree of inflation than they have in the United States. I am not trying to defend the government; I am not trying to make an argument; I am just stating to the House of Commons such facts as we have been able to ascertain, and upon which we have to base conclusions.


An hon. Member:: What about cigarettes?


Mr. SI. Laurent:: Well, here I get the indication that while in 1939 it took half an hour's work, at prevailing wage rates, to buy a package of twenty cigarettes, at the present time it takes only twenty minutes' work.
I have dealt with bread; let us now turn to butter. Creamery butter in Washington is quoted at 78 cents, while the price in the A & P store in Ottawa is 68 cents. For eggs', grade A large, the Washington price is 83 cents, and for the same grade in Ottawa, 84 cents. Turning to cheese, the price for American cheddar mild is 55, medium 59 and sharp 63, whereas Canadian cheddar cheese is 49. Maine or Long Island potatoes are 10 pounds for 39 cents, and the Ottawa price for Ontario potatoes is 35 cents for 10 pounds. I am sure a good many would feel that Ontario potatoes are just as good as Maine or Long Island potatoes. I know I got some from northern Ontario, from a friend of mine who was kind enough to send a bag to 24 Sussex street, and they are as nice potatoes as I have ever seen anywhere in the world. Taking canned salmon, pink, at Washington for one pound net the price is 65 cents per can, and at the A & P store in Ottawa a one-pound can of pink salmon is 45 cents. Eight-ounce packages of Kellogg's corn flakes, the same corn flakes in both countries, are two packages for 29 cents in Washington, 14J cents each, and in Ottawa 14 cents a package. Chase and Sanborn coffee is 94 cents in Washington and 92 and 94 in Ottawa.


Mr. Coldwell:: How much?


Louis Stephen St-Laurent: 92 and 94.


Major James William Coldwell: Not Chase and Sanborn.


Louis Stephen St-Laurent: Chase and Sanborn coffee at the A & P branch.


Major James William Coldwell: It is $1.08.


Louis Stephen St-Laurent: I did not make up the list. I was supplied with it.
The Address-Mr. St. Laurent


Stanley Howard Knowles: It is over $1 in the west.


Louis Stephen St-Laurent: Perhaps my hon. friend will drink more while he is here and pays 94 cents for it. Taking orange pekoe tea, the Washington price is 66 cents per half pound, and at the A & P store, Ottawa, tea is 89 cents per pound.


Major James William Coldwell: Is the Prime Minister (Mr. St. Laurent) comparing the same things when he compares tea and orange pekoe tea?


Louis Stephen St-Laurent: It is orange pekoe in both instances, and the price in Ottawa is 89 cents. These were the prices on the 12th October at the A & P supermarket store in Ottawa. As to sugar, our price is a little higher for granulated sugar. Five pounds of granulated sugar cost 50 cents in Washington, and granulated sugar, white, is 11-2 cents per pound in Ottawa instead of 10. However, brown sugar, in packages only, is 13 cents a pound in Washington, and at the A & P store in Ottawa it is 12 cents per pound.


Mr. Green:: What about horse meat?


Louis Stephen St-Laurent: I have not priced horse meat. I have not yet become interested in horse meat.
These are actual facts, which have their importance in determining whether or not we should expect to do better than has been done in the United States with respect to such controls. I have a clipping from the Montreal Gazette of October 3 in which it is pointed out that these ceilings are such that they are bringing about a reduction in supplies. The editorial continues as follows:
The result is that with an all-time record number of cattle on United States ranges, the volume of slaughterings has shrunk by 10 per cent below this time last year. Cattlemen are holding out for the high prices they can obtain from "black market packers" who resell to hotels, restaurants, night clubs and others willing to pay above-ceiling prices for under-the-counter supplies. Packers have refused to bid on large scale orders which the United States army sought to place to supply meat rations for soldiers both at home and overseas.


Mr. Brooks:: Might I ask the Prime Minister what is the date of that article?


Louis Stephen St-Laurent: October 3, 1951. The editorial is entitled "Price control with a catch in it", and is to be found in the Montreal Gazette of that date. The hon. member may have some misgivings about the correct appreciation of the facts by this writer in the Montreal Gazette. I would not blame him because I frequently have misgivings about some of their appraisals of other subjects; nevertheless it demonstrates that there are serious difficulties involved. The leader of the opposition (Mr. Drew) has said in this house that he was not advocating the overall ceilings that were administered during

The Address-Mr. St. Laurent the war. I do not want to be unfair to him, and as I have his exact language here I will quote it. He said, as recorded at page 1734 of Hansard of April 9, 1951:
I have sought to make it clear on earlier occasions in this house that much more moderate controls, much more flexible controls would be sufficient to deal with the situation which has arisen...
We see what kind of controls they have endeavoured to enforce, and which the hon. member for Rosetown-Biggar (Mr. Coldwell) says are more effective and harsher than those they used during most of the period of the last war, and we see what the result is. I do not think the Canadian public would be satisfied to have us fix ceilings at the prices I find in the ceilings published in the United States on the 28th of September. I do not think the consuming people of Canada would want their government to be stating that the price it was fair to ask the consumers to pay for porterhouse steak was $1.34, for tenderloin, or anything of that kind.


Major James William Coldwell: Have you comparable figures as to the prices paid to the farmers for the primary products and to labour for wages?


Louis Stephen St-Laurent: No.


Major James William Coldwell: That makes a difference.


Louis Stephen St-Laurent: I am merely comparing what the situation is. I do knoto that a lot of our producers of beef are selling to the United States market because of the prices they can get there, and that has had the effect of making it necessary for our Canadian slaughterers to pay similar prices or see the animals move across the line. Perhaps I should read a little more of the editorial in the Gazette to which I have referred. It has this to say:
Major packers are finding that they cannot make even their established average profit of one per cent or less on turnover, and are beginning to operate at a loss, if they buy live animals at advancing present prices, slaughter and process them, and attempt to sell them within retail price ceilings. One company. Armour, showed a loss of $1-6 million in its latest quarterly report, a Cleveland firm has shut down rather than go on losing money, and the big Wilson company has cut back its slaughtering plant operations to three weeks a month.
These are things which I am not defending, but which I am merely stating are happening in the face of this situation where a lot of people-I will not say everybody-have quite a lot of money and rather than keep their money are willing to spend a portion of it for certain supplies. That being the situation I do not feel that I can agree with the leader of the opposition when he says that inflation in Canada has outrun inflation in the United States. That does not appear to be so by the actual prices at which commodities are being sold. I have another comparison of prices but I do not want to burden

the house with unnecessary figures, as I think I have said enough to indicate that if one investigates that is what he will find.
There is no doubt that prices are high. There is no doubt that certain sectors of our population are feeling some hardship, but not all sectors. In spite of high prices the average wage paid in our manufacturing industries will buy more today than it did before the war. The prices that our farmers are getting for their produce, in spite of the fact that they are paying higher prices for things they have to buy, is giving them a larger share of the national income at this time than ever before. I am not saying that is not as it should be. I notice an hon. member shaking his head but let me say that he is not the only one who knows the farmers in this country. I know farmers in various parts of Canada and I know for a fact that at the present time they are getting a larger share of the national income than they ever got before. I am not saying that they should not. I am not saying that they are getting too much. I know that they work hard for what they get and I feel that the prices they are getting under present price levels are not too high and that it would not be fair to try to roll them back.


Mr. Wright:: How about that portion of
the national income-


An hon. Member:: Sit down.


Jean-Paul Stephen St-Laurent: The hon. member will
have an opportunity of putting his information before the house. I have had many opportunities to observe what is going on and I am simply stating what has come to my knowledge. I am most happy to testify to the fact that the larger portion of the national income which the farmers are receiving is being used to improve farm lands throughout the country. I know that for a fact. I have seen evidence of it with my own eyes. They are increasing their productivity through the use of the larger portion of the national income they are getting. I think that is all to the good. Ultimately we will be most happy that that has been done. We have an increasing population that will have to be provided for largely by areas already under cultivation. Those areas must be made to produce more or we in this country will not be producing our share of the food requirements of an increasing mankind.
I stated that A & P in Ottawa were selling Chase and Sanborn coffee at 94 cents but I understand it was their own brand that was being sold at that price while Loblaws were selling Chase and Sanborn at $1.06.

I have said that the average rate paid to labour in our manufacturing industries provides a greater purchasing power today than it did before the war. I must confess that I was led into this by a tabulation which had been made in the United States to show what an hour's wage down there purchased in terms of certain foodstuffs. I asked to have a similar tabulation prepared for Canada and I have here figures showing the estimates of food quantities which one hour's work of a manufacturing employee at average wages would buy in certain periods. While the first item is not disappointing, it does show that in October 1939 an hour's work would purchase more sirloin beef than it does at the present time. The figures follow:
October	October	June1939	1950	1951Sirloin beef 	lbs.	1-6	1-2	11Bacon 	.... lbs.	1-3	1-5	1-7Eggs 	.dozen	1-2	1-5	1-6Potatoes 	... .lbs.	22-8	36-5	39-1Bread 	... .lbs.	7-3	9-5	9-9Milk 	.quarts	41	5-6	5-9Tea 	lbs.	[DOT]7	1-0	1-1Coffee 	... .lbs.	1-1	1-1	1-1Sugar, granulated	.. .lbs.	6-8	8-5	9-0Butter 	... .lbs.	1-4	1-5	1-7
On September 20, 1951, the president of the Canadian Federation of Agriculture was discussing high prices and I have here certain excerpts from what he said:
Food prices are not high in relation to other prices or in relation to wage rates or to the profits being made by industry. Most food, in terms of the hours of work required to purchase it, is cheaper than it has ever been. When we compare average hourly earnings in manufacturing industries with average prices of staple food products, this fact is borne out.
He goes on to give other examples.
Others who can control their production and who do set or help establish their price or wage levels, have been more responsible for the high price structure of today than has the farmer.
Labour uses the strike to force wages up, and maintain them. Industry uses resale price maintenance, not only to establish their own prices to consumers, but also to fix the margin for the distributor in between.
Resale price maintenance is a form of price fixing. If businessmen want free enterprise and want farmers and others to compete in a competitive market, why don't they do so themselves? Resale price maintenance ought to be made illegal and prosecuted as a restraint of trade.
In my opinion, there are just as many low income farm families as there are low income urban families.
And today, because of a high price structure, many farm families have to do without lots of things that are considered ordinary necessities in the average urban home.
If some food prices are high for the low income large families-as they undoubtedly are-aren't we all helping them out by paying taxes for family allowances? Canada paid around $300 million infamily allowances last year.
The Address-Mr. St. Laurent
So the situation is that there are large sectors of the population of this country whose incomes have not only kept up with but a little ahead of the increasing cost of living, contrary to what has happened in the United Kingdom. In the United Kingdom the index of wages has been a little slower in its rises than the index in the official -cost of living since the war. In this country it has been a little in advance of the index of the cost of living. That does not mean that there are not large numbers of people who are finding it difficult to pay these high prices. This has not passed unnoticed.
The leader of the opposition says that a pension of $40 per month is not much better than- $20 per month used to be. It was $20 per mon-th before the war; the pension has been doubled, but the cost of living index has not quite doubled. I believe there is going to be substantial relief through the payment of this "no means test" pension to all persons over 70 years of age. There are many persons whom we know and meet socially who are on retiring allowances, not very large, for whom an additional $40 per month, or if both members of the family are over 70 an additional $80 per month, is going to be of substantial help in meeting this higher cost of living.


Stanley Howard Knowles: Will the Prime Minister
permit a question before he leaves that table dealing with the purchasing power of an hour's labour in Canada? Has he a similar table for the United States?


Louis Stephen St-Laurent: I have not it here, but I have it in my office. It was because I saw a table prepared for the United States that I asked to have the Canadian table prepared. I shall get it and let the hon. member see it.


Stanley Howard Knowles: Perhaps the Prime Minister would let me have it when I speak.


Louis Stephen St-Laurent: I have no objection. I believe it is not only permissible but it is our duty to bring before the house and the public all the pertinent facts that can help to form a sound conclusion, not only about what is desirable but what is practicable under present conditions.
The leader of the opposition spoke of what he described as the unnecessary expenditure that was being made in government. The Minister of Finance (Mr. Abbott) described in his budget speech what was being done in that regard. Before passing to that, might I suggest that those who are filled with admiration for what is taking place elsewhere may perhaps be in the position to which the poet referred:
'Tis distance lends enchantment to the view, And robes the mountain in its azure hue.

The Address-Mr. St. Laurent
Perhaps that explains why I have heard laudatory remarks from many people in the United States about how we have been doing in Canada. I have heard also the same kind of remarks from some Englishmen. It may be that there, too, "distance lends enchantment to the view".
From the Financial Post I clipped an article, not because of what was written by the Financial Post but because of what was cited from the New York Times. One of the New York Times writers, Mr. Edward Collins, refers to the drastic dissimilarity between Canada and the United States. He says:
In this country (United States) we are talking about balancing the budget and putting the defence effort on a pay as you go basis. But Canada has been consistently budgeting for surpluses for several years, one of the consequences being that she has reduced her debt by 15 per cent since 1946. While our own treasury, with the undisguised encouragement and support of the White House itself, has resorted to every artifice to defeat the efforts of the federal reserve to tighten money rates, Canada has carried out a vigorous and concerted program in this area. While both the administration and congress here flinch at proposals for increasing consumer taxes, the dominion is raising almost half its revenues through this, the most antiinflationary of all forms of emergency taxation. And while Washington has found even the modest restrictions imposed by the reserve board on instalment credit politically unendurable, a Canadian who wants to buy a car today must be prepared to put up half the purchase price in advance and pay the rest within 12 months.
The leader of the opposition said it was a mistake to restrict credit on cars and like articles.


George Alexander Drew: To that extent.


Louis Stephen St-Laurent: In this article that was not the view, though it may have been a mistaken view that the financial critic for the opposition was expressing at that time. It may have been a mistake in appraisal at that time, but the hon. member for Greenwood in his criticism of those measures when they were brought before the house said that they were too late and should have been adopted months previously. He said it was better late than never.
I am not suggesting this for the purpose of casting blame. I am bringing this before the house for the purpose of having everyone realize that we are dealing with a difficult problem about which any of us can make mistakes. I do not believe any of us can be sure in advance that any special line of conduct will not turn out to be mistaken. We have to do our best, and that is what we have been doing. We have been doing those things referred to, and we have also been endeavouring to keep down the civilian part of our budget.

In the broadcast I made in September I said that the government had made serious and constant efforts to keep down its own expenditures. In commenting on the broadcast the Montreal Gazette said that government savings had been like a drop in a bucket full of holes. Other critics are also fond of blaming the high cost of living on the alleged extravagance of the government, and its failure to keep its expenditures within bounds. In his budget speech last spring the Minister of Finance described the efforts that were being made to keep down expenditures. From my day to day contact with my colleagues I know that each one of them is watching the various phases of the administration of his department in an endeavour to keep down expenses. Hon. members know what efforts were made to reduce expenditures in the Post Office Department. They know the kind of reception those measures received throughout the country and in this house. While each one of my colleagues is giving careful consideration to some particular phase I felt that I should like to know how our expenditures on general services compared with the expenditures that were being made before the war. I asked the officials in the department of my colleague, the Minister of Finance (Mr. Abbott)-he was not here so I did not get his permission-to get figures and to give me a calculation, as accurately as they could, so that comparison might be made. It is exceedingly difficult to make a comparison, and I myself am not convinced that these figures will be convincing to others, but I wanted to know what they were. It is not easy to make comparisons because the services have been expanded; they have been modified; and of course a great many items of substantial expenditures have been added which were not there before.
I asked them to exclude, as not being at all comparable, the items on defence, on veterans' benefits and on the service of the debt. They result largely from the last war and that made a complete change in the situation. There have been modifications in other expenditures. Before the war one of our substantial items of expenditure was unemployment relief. The comparable expenditure is not on so large a scale now; our contribution to the unemployment insurance fund replaces that expenditure. But it seemed to me that the only useful way to make a comparison would be to see what we are now spending on the services which existed before the war, although they have been expanded.
1 asked them to show me what the expenditure was in 1938-39, excluding defence,

veterans' pensions and other benefits and the service of the national debt, and to give me the estimated cost of the comparable services in the present fiscal year, excluding the same three items and all the new services or expenditures which have been established since 1939, such as, for instance, family allowances and the payment made to the provinces as a rental for their abstaining from imposing certain forms of taxation which we impose in their stead. In 1938-39 the total was $326 million or $29.20 per capita. For 1951-52 the comparable estimates total $719 million or $55.80 per capita. The increase per capita is 91 per cent. This is just over the percentage increase in the cost of living index and a little less than the percentage increase in the wage level.
I think this then would indicate that the government has held down its expenditures on these services fairly effectively. It must be admitted that, for instance, in a service like that of the comptroller of the treasury, he has four times as much to do as he had during 1939 because he has to check the proper expenditure and accounting of everything in these new services that have been established. The Department of National Revenue has at least four times as much revenue to collect and account for as it had before 1939. Though I would have been somewhat happier if the increase had been less, I feel that a fairly close tab has been kept on the general overhead that has to be provided for in order to take care of the large increase in the nation's business.
What can be done to prevent further inflation? I hope there will not be further inflation. Recently in many of our papers we have seen advertisements of cuts in prices, some of them attributable to the reference in the speech from the throne to the fact that the fixing of resale prices was going to be made illegal. I am informed that there are quite large inventories throughout the country-


Mr. Maclnnis:: Why then are prices going
up?


Louis Stephen St-Laurent: 
Mr. Blackmore:: Hear, hear.


Jean-Paul Stephen St-Laurent: We cannot get away from the fact that while we are building up these combined forces of the free nations to create the kind of force that is apt to deter aggression, we are taking a certain proportion from the annual production and are not diminishing the purchasing power, except through taxation.
The situation we have to face is that this upbuilding of the kind of strength that will deter aggression is a duty for all of us. It is not something that we can leave to the other fellow. It is something we all have to provide and pay for by doing without some of the things which we should like to have and which it would be possible for us to have if we did not feel it to be desirable to devote that portion of our national production to this joint effort to maintain peace in the world.
I have expressed that view in many places in this country. I have said in many places throughout the country that I felt that was what the people of Canada wanted us to do, and that if they did not want us to do that they should make their views known. That would not mean we would change our views, but it would mean that we would make room for somebody else who shared their views to carry on the affairs of the country in our stead. That is the situation; and again I can say that as regards immediate additional measures to curb inflation, while others may develop, the only one we are prepared to submit at this time is the one that will arise out of this report of the combines committee with respect to resale prices.

The Address-Mr. Coldwell
I do not think that is going to have a very substantial effect on the index of the cost of living; I think it is apt to bring about some change in resale prices, because I do know that there are instances where the spread between what the consumer has to pay and what goes to the primary producer seems to be inordinately large. But there is no doubt that the Canadian public has, perhaps without realizing it, demanded from the distribution trade of our country far greater and better services than those that used to be provided. Those greater and better services have to be paid for, and they are paid for out of the price that is fixed by the distributor for the item he delivers to the consumer. That is inevitable in our form of society. It may be that the establishment of those supermarkets will bring about some change. It may be that there will be devised, as the Labour party expresses its hope there may be devised, methods of distribution which will not be as costly as they are. But they are costly today. They are costly in the United States; they are costly in the United Kingdom. We are all up against the same problem and I am sure that we are, all of us, trying to meet that problem as best we can.
We are not all agreed as to what are the best methods of meeting it. I am sure that all of us will be glad to hear from other hon. members what their suggestions are, and I feel sure that their suggestions will be made in the same objective spirit in which I have tried to make clear the government's position. It is a world problem. It is a problem that is giving concern all over the world to those who have the responsibility of government, to the extent that there are some who are saying that it will be a very dubious victory for whichever party in the United-Kingdom has the responsibility for the headaches that seem to be quite inevitable for a certain period ahead of us.


Major James William Coldwell: We
have heard two very interesting speeches this afternoon, and I shall find it very difficult for once to remain within the confines of the forty minutes allotted to me because the main subject is one upon which we feel rather keenly and upon which we have been quite consistent. However, before I begin to discuss the problem I want to join with the Prime Minister (Mr. St. Laurent) and the Leader of the Opposition (Mr. Drew) in congratulating the mover (Mr. Cauchon) and the seconder (Mr. Simmons) of the address in reply to the speech from the throne. In both instances they acquitted themselves well.
I should also like to associate myself with what was said regarding the satisfaction and thankfulness that are felt because His Majesty

the King has improved in health. We hope that his health will long continue to improve, because after all the monarchy is the symbol of unity that we have in this great commonwealth of nations.
I am glad too that we were able to have in Canada the presence of Her Royal Highness Princess Elizabeth and the Duke of Edinburgh. I hope the remainder of the tour, however, may be just a little closer to the people than it was in the capital city of Ottawa.
I cannot deal with everything that is in the speech from the throne. With regard to the old age pensions legislation, we shall reserve our comments until the legislation is before us. I regret, too, the omission of any mention of the need to review veterans' pensions and allowances by a committee. I think the increases in the cost of living that they have been subjected to, in common with all the rest of the people of Canada, warrant increases, or a cost of living bonus; and all of it, may I say, without a means test.
The St. Lawrence seaway is mentioned, and we shall have something to say on it later on. May I also say that I was a bit surprised when the commission was appointed to go once again into the feasibility of the South Saskatchewan river scheme. After all, we in the province of Saskatchewan had been led to believe by the Minister of Agriculture (Mr. Gardiner) on more than one occasion that the decision had been taken, and that all that was awaited was the consent of the province of Saskatchewan, and perhaps in some respects of other provinces. But now we have another commission set up to inquire into the reports that have been made by other commissions or engineers on this particular project.
I am glad that the people of the maritime provinces are to get the Canso causeway. Whether it should be a bridge or a causeway is a matter of course for expert advice to the government, and when the matter is before the house we can examine what advice the government has.
I am glad to see, too, in the speech from the throne that we are to get some legislation dealing with the railway problem. I think that what is suggested, the assumption by the dominion of part of the transportation costs over the unproductive area between east and west, is insufficient to remove the discrimination that exists; but we welcome a step in that direction.
This afternoon once again the question of the marketing of the new crop was before us. As hon. members will recall, last spring we

urged the appointment of a transport controller. That has been done much too late, and while. I think the present transport controller is doing a moderately good job toward giving service to the country, I am convinced that something more must be done so the farmers may be assisted in either holding the crop on the farm or having storage space provided and payments made for the amount of grain that they find it necessary to store.
There is one other point that I should like to refer to briefly, namely, the Massey report. I am glad to see that we are going to get legislation on the Massey report. May I just say that I think in its conception, in the matter of the language that it uses, it is not only a great report on a great national problem or a group of national problems, but a contribution to the general literature of Canada, a splendid report in every respect.
I want to deal with a topic that has been under discussion this afternoon, namely, the increase in the cost of living. The amendment moved by the leader of the opposition is of course in very general terms. Because we have been consistent first of all in resisting the removal of beneficial controls and subsidies and subsequently in urging that where controls can be beneficial and subsidies useful to bring down the high cost of living they should be re-adopted-that has been our position in this house ever since 1946, and today we offer no apologies for that position -I think that I should be very specific.
I can understand some hesitation in this regard on the part of the leader of the opposition (Mr. Drew) and of the party he leads because I am not forgetting that it was largely because of the insistence of the Progressive Conservative party in this House of Commons and across the country, as well as that of the powerful press of the country and of the financial institutions and other interested people, that controls were removed. At least the speed with which the controls were removed was accelerated by that propaganda.
On the other hand we have been consistent. Therefore I am going to move a subamendment, seconded by the hon. member for Vancouver East (Mr. Maclnnis):
That the amendment be amended by adding thereto, immediately alter the words "high cost of living," the following words:
such as the making of provision for price controls and the payment of subsidies, where necessary, so as to equalize the sacrifices our people are called upon to make at this time.
That leaves a fairly wide area within which the government can bring before the house the proposals to make this equalization effective.
The Prime Minister (Mr. St. Laurent) says of course that this cannot be done at the
The Address-Mr. Coldwell present time. He says that neither the government nor the Progressive Conservative party nor the C.C.F. could control prices. I am going to ask this question: Why does the government say it will do it when and if it becomes necessary?


Douglas Charles Abbott: It does not. It has never said any such thing.


Major James William Coldwell: It has said it, over and over again.


Douglas Charles Abbott: Rubbish.


Major James William Coldwell: If I have understood what the Minister of Finance (Mr. Abbott) has said on more than one occasion-and I think I understand the language fairly well-then certainly we have been told that measures will be taken which are necessary to bring about a better condition for the Canadian people in regard to prices, and so on.


Douglas Charles Abbott: Oh, that is different. We will do what is possible; but we will not attempt to achieve the impossible.


Major James William Coldwell: That they will do what is possible; and the Prime Minister says it is impossible. So we might as well know and admit where we stand at the present time. We know now where the government stands at the present time in relation to this matter. The Prime Minister spent a great deal of time this afternoon reading from a Labour party pamphlet. It is a pamphlet which I myself read, and the contents of which I have noted very carefully. But let us remember that while the cost of living did rise in the British isles in the first six months of this year by a percentage greater than in Canada in the same period, it rose from a base which was very much lower than the cost of living in Canada. The Minister of Finance-


Douglas Charles Abbott: The index rose less, not the cost of living.


Major James William Coldwell: All right-"the index". The minister has just returned from London-


Douglas Charles Abbott: Paris.


Major James William Coldwell: Paris. He knows that in London today the cost of bread is a fraction of what it is in Canada.


Douglas Charles Abbott: How much is the subsidy on bread?


Major James William Coldwell: I will deal with that. He knows that the cost of meat in London is a fraction of what it is in Canada.


Douglas Charles Abbott: Only you don't get the meat.


Major James William Coldwell: On the amount of meat
that is rationed. I know, of course, that the quantity is small. But let me say that the British are not rationing people by the length
44

The Address-Mr. Coldwell of their purses. Everybody gets his share, even though that share is small, and at a price within his reach.
One could go down the list and refer to milk and all the other basic commodities in that country. True, they had to release some of their controls; but why? They had to release some of their controls because of the point made by the Minister of Finance a moment ago; because they have had to pay increasing subsidies for these basic supplies from overseas. And why have they had to pay increasing subsidies? Why have they had to pay more for their supplies from overseas? Because countries like Canada and the United States have allowed inflation to run wild wflthin those countries.


Douglas Charles Abbott: Would my hon. friend allow a question? Just as a matter of interest, does he think the Canadian farmer should get less for his bacon-


Major James William Coldwell: No.


Douglas Charles Abbott: -because he ships to the United Kingdom?


Major James William Coldwell: No. But just a moment; that is one of those catchy questions.


Some hon. Members:: Oh, oh.


Major James William Coldwell: Oh, you can laugh; but what the minister asked me was another question, and I will tell him why. It is because the farmers' cost of production has risen beyond the value of his returns, since this government allowed controls to be removed. That is the answer to his question. As a matter of fact the answer is to be found in the government's own report, put out by the bureau of statistics. What does it show? It shows that the average cost of living in Canada rose in August by about one point; but it also shows that the return received by the farmers for their produce in the same month decreased by seven points. So, you see, I am talking about the justice that would be achieved by subsidies and controls. So far as the primary producer is concerned, his returns are falling now.


Mr. Argue:: Bacon is down $7 a hundredweight in one month.


Douglas Charles Abbott: Which price does my hon. friend want to continue to go up?


Major James William Coldwell: I will answer that. If the government is going to allow the basic prices of other commodities to rise, and monopolies to continue to set those prices, then the farmers' prices must go up. We have to face it. But it is because the government, ever since it began to remove controls, has let inflation run wild in this country-and in the neighbouring country the same applies-that in European countries as well as in Canada

prices have continued to rise. That increase I say is due to a large extent to inflation in North America.
The Prime Minister this afternoon compared certain prices in Washington and New York with prices in Ottawa. Well, had he taken, for example, a comparison of prices of the same commodities in Minneapolis and Winnipeg he would have found a somewhat different condition. Be that as it may, a statement about two weeks ago by Mr. Michael DiSalle, director of the office of price stabilization in the United States, which office is in charge of the stabilization policy of the federal government in that country, had this to say:
Up to February 15, 1951, from Korea, the cost of living in the United States increased eight per cent. These rises cost our people $16 billion.
The increase from February 15, 1951, to June 15, 1951, was eight-tenths of one per cent, or less than $2 billion.
I should add that from February 15 to June 15 the office of price stabilization in the United States exercised some control over American prices. He went on to say this:
While we held this price line, the index in Canada -which has no direct price controls-increased five and three-tenths per cent in that period.
Had our prices been going up at the same rate as Canada's1 it would have" cost the American consumers $7 billion-$150 per family of three.
That is not my statement; it is the statement of Mr. DiSalle of the office of price stabilization in the United States. So I say that our criticism of the government in respect to this matter is fully justified; and I hope that hon. members, wherever they may sit, will support both the amendment and the subamendment, in order that we may give to the people of Canada an assurance that we at least are determined to bring the matter forcibly before our government. The cost of living index today is 189-8, the highest in our history and, as I said, during the same month, August, farm prices dropped another points.


Mr. Gibson:: Farm income or farm prices?


Major James William Coldwell: Farm prices dropped to that extent, and let us bear in mind that the failure of the government to bring about any stabilization in the price level has reduced the purchasing power of the Canadian dollar to 52 cents in terms of its value in the base period of 1935-39.
The Prime Minister (Mr. St. Laurent) and the Minister of Finance (Mr. Abbott) have said that there must be more saving because more dollars chasing fewer goods will cause further inflation. I thought the Prime Minister rather discounted that statement at the end of his address when he said that inventories were unusually high and that

manufacturers could not move goods. It seemed to me then that goods should be chasing dollars unless something else intervened, and I think that something else is monopolistic price fixing by some of the powerful organizations in this country. I want to see our young people save and put a little money by. I have encouraged it whenever I have had the opportunity. One afternoon about a month ago I happened to be in the Royal Bank. I was standing talking to one of the officials at the counter when a young lady walked across with a couple of hundred dollars in bonds that she had bought about 1943 or 1944, I think she said. She handed over the $200 in bonds and what did she receive? As far as I could hear, it was $198 or thereabouts.


An hon. Member:: She did well.


Major James William Coldwell: Someone says that she did well. I heard that young girl's remark. She said, "Oh, I am not going to lend the government any more money. I lent them $200, when I could have bought something else with it, and now I get $198", or $196, as the case might have been. Let me say at this time that I am proud of the fact that when the victory bond campaigns were first instituted the hon. member for Melfort (Mr. Wright) on behalf of this group urged upon the then minister of finance, Right Hon. J. L. Ilsley, that we should guarantee 100 cents on the dollar when these bonds became payable, and I am glad that has been done with the new savings bonds.


Douglas Charles Abbott: I know my hon. friend wants to be fair.


Major James William Coldwell: Quite fair.


Douglas Charles Abbott: The point that was made by the hon. member for Melfort, if I understood him correctly, was that the bonds should be paid at 100 cents on, the dollar when they became due. No Canadian bond has ever been paid in any other way.


Major James William Coldwell: No, not always. Look at the savings bonds today.


Douglas Charles Abbott: What he was suggesting was that all government obligations should be demand obligations.


Major James William Coldwell: Quite fair, victory bonds which were being sold to the ordinary man in the street and the ordinary small person who was saving his money. We were told at that time that it could not be done. I am glad to see that it is now being done with the savings bonds. May I say to hon. members that in 1946 the Canadian consumer was able to obtain basic food and other supplies at more properly related prices. The consumer was protected
The Address-Mr. Coldwell against high prices. The producer was protected against low returns. We have seen the result of government policy already, of course, in the falling consumption of milk, for example. The bureau of statistics tells us that the consumption of milk dropped by 20 quarts per capita in our country between 1946 and 1950. That is a serious thing when we realize how basic milk is to good health.
Of course we were told that if controls and subsidies were removed, if business was permitted to return to normal competition, to make normal profits and all the rest of it, production would increase and prices would go down. That was the theory. I think the Minister of Finance will confirm my statement that that was the theory presented here. What have we seen? We have seen prices go up, corporation profits reach the highest level in our history, and prices continue to soar.
In a recent broadcast, which I subsequently criticized, the Prime Minister contended that if prices were controlled there might not be a fair distribution of some scarce commodities without rationing. Let me say once again that the Canadian people are rationed now, not by tickets but by a much more cruel, harsh and unjust system of rationing, rationing by the purse.


John Lambert Gibson: Has that not always been true of every nation at all times?


Major James William Coldwell: That is an old Tory talking. That has always been done and therefore it always has to be done. I intend no reflection on the Progressive Conservative party; I said "Tory". May I say that we were treated this afternoon to a great deal of information regarding what is happening in other countries. I remember that the Minister of Finance took me to task because I said that certain people I had met in this country recently had stated that our cost of living was the highest of any country they had visited. I do not want to put on the record who they are but I would not mind telling the Minister of Finance afterwards. Incidentally, they were not Britishers. The minister said that no good could be done by discussing what was happening in other countries. This afternoon we heard a great deal about what was happening in the United States and in the United Kingdom.


Douglas Charles Abbott: That was not quite what I said.


Major James William Coldwell: Pretty close to it.


Douglas Charles Abbott: I compared the results, and, I said that having said that I did not think there was anything to be gained by further discussion.


Major James William Coldwell: That is right.

The Address-Mr. Coldwell


Douglas Charles Abbott: I was limited to a fifteen minute broadcast.


Major James William Coldwell: So was I.


Douglas Charles Abbott: I could have said a lot more.


Major James William Coldwell: I say that the people in the lower income brackets are rationed out of the market by high prices, but those who have money can still buy goods. That is why we suggest in our amendment that we should have certain controls and subsidies in order to equalize the sacrifice that we are called upon to make at this time. Under the present system there is inequality. Goods in short supply are denied to one group and they may be obtained by another. In my opinion that in effect is class legislation of the worst type. The budget emphasized the policy of the government. When it wanted to restrict the manufacturing of stoves, washing machines, automobiles and so on it rationed the supply through a special excise tax and through increasing the sales tax by 25 per cent. In other words, as I understand it, taxes were increased and therefore prices were increased in order to cut down consumption.


Mr. Macdonnell (Greenwood):: And the
revenue was increased.


Major James William Coldwell: And the revenue was
increased as well. As has already been mentioned this afternoon, hundreds of thousands of Canadians are in the direst possible need of homes. I think perhaps the need today is greater than it has ever been, but what does the government do? It takes deliberate steps which in effect ration our less fortunate citizens out of the market, and generally inflate the prices of housing accommodation both for sale and for rent. We take direct issue with the government in these matters. We are convinced' that if under a system of price controls any essential commodities were in short supply the Canadian people would rather have rationing by tickets than rationing by the purse, and incidentally our view coincides very closely with that expressed in October, 1941, by the late Mr. Mackenzie King. I am going to quote from his radio address on that occasion, when he said:
Rising prices unless controlled will make it more costly and therefore more difficult to finance the war.
All we have to do is substitute the word "defence" for "war".
Rising prices, unchecked, will spread confusion and uncertainty in industry and trade. They will hinder production and the proper distribution of supplies. They will make the cost of living rise more rapidly than wages and salaries. The value of savings will be materially lessened. The result would be hardship to nearly everyone, and hardship in very unequal measure.

And again:
Rising prices, a rising cost of living, do not have the same effect on all households. The smaller the family income and the larger the family, the more serious the hardship imposed. For those with small incomes, rising prices of clothing, food and other necessities may mean serious hardship, while for those with larger incomes only luxuries and small comforts may have to be given up.
Rising prices thus serve to aggravate the inequalities in society, and to throw the heaviest burdens on those least able to bear them. Wartime experience has shown that prices rise faster than wages or salaries, and bear more heavily still on those who live on small pensions or life savings.
The truth is that all but an insignificant minority of the population would be worse off as a result of rising prices, if prices were permitted to rise unchecked, and in general the relatively poor would suffer more than the relatively well-to-do.
I know that my hon. friends will say that was wartime, but Mr. King had some good advice to give the parliament of Canada and the people of Canada for the post-war period when he said the following in an article which appeared in Maclean's magazine in 1945:
Immediately after the war the dangers of inflation may be even greater than they are now. The Canadian people cannot afford to sacrifice the benefits of wartime stabilization by relaxing controls too soon.
That is precisely what parliament did. We sacrificed the benefits of wartime stabilization by relaxing controls too soon. Apparently the Minister of Finance (Mr. Abbott) did not like my statement, as he indicated in a radio broadcast the other evening, that powerful newspapers and prominent industrial and financial leaders had joined in the campaign demanding the removal of all controls. I say that the Canadian consumer is paying through the nose as a result of the policies demanded by powerful interests, supported by all other political parties, and made effective by the Liberal government of Canada. As I have already remarked, these high prices have been accompanied by the highest corporation profits in our history.
I know what has been said and what will be said again, that you cannot have price controls unless you have wage controls and, incidentally, unless you have subsidies. Let us look first at wage controls. Hon. gentlemen will remember that in a brief presented to the government on February 10 this year the Trades and Labour Congress of Canada, the Canadian Congress of Labour, the Canadian and Catholic Confederation of Labour, and the dominion joint legislative committee of the railway transportation brotherhoods pointed out that many wage and salary rates were unduly low and that distinction should be

made between the freezing of any wages and salaries at a low level and wage stabilization. I quote from the brief as follows:
The labour movement recognizes that wages could go up fast enough and far enough to break a price ceiling, though it sees no immediate danger of anything of the sort. It believes that the proper way to deal with this question is a government-labour-management conference to work out methods of wage stabilization. This offers a prospect of a wage policy which will do two things, both essential: (a) preserve the spirit, the principle, of collective bargaining, and (b) bring the experience of labour and management into the defence effort. If our government institutes a general policy of price and production controls, labour is ready to take part in a joint government-labour-management conference to consider wage stabilization.
That is clear-cut, but it has never been accepted by the government. It discounts entirely this parrot cry that if you are going to freeze prices you must freeze wages. Many of the wages and salaries paid in this city at the present time could not be frozen at their present levels. I have been amazed in the past five or six weeks to be told by men standing behind counters, holding as I thought fairly responsible jobs, that although they were married they were earning less than $150 per month. The girls employed in some stores in this city are earning considerably less than $150 a month, as are some of the labourers. Let me repeat the word of organized labour, and I stress the word "organized". They say that if the government institutes a general policy of price and production controls they are ready to consider ways and means of effecting wage stabilization.
I would like to go somewhat exhaustively into our experience during the last war and what was said of it subsequently, but time will not permit. When we talk about controls we are led to believe that there are no controls now, but the fact that the government intends to amend the Combines Investigation Act indicates that there are controls of some description. I was quite interested on Thursday or Friday to read the reaction of the Canadian Manufacturers Association to the MacQuarrie report and to the suggestion that legislation would be brought into the house to prevent price fixing. I notice that statements in opposition were made by Mr. Norman Leach, who stated:
It is an undemocratic and high-handed move to deny a manufacturer the right to protect his goodwill right down to the consumer.
Then he added:
If all controls are removed a lot of articles will go up in price at once.
Was he referring to the people's controls? Was he referring to parliamentary controls, instituted by those responsible to the people's duly elected representatives? Not at all.
The Address-Mr. Coldwell There are controls. They are objecting to the removal of controls instituted by members of the Canadian Manufacturers Association. We have known for some time that these controls exist. It is not a question of whether we are going to have controls, it is a question of who is going to do the controlling.


Donald MacInnis: These are people who are opposed to government controls.


Major James William Coldwell: These are the people who from one end of the country to the other opposed government controls. Not only did they make speeches; they financed radio programs which I think were a contravention of our radio act when they engaged in political discussions over the air on behalf of their own Canadian Manufacturers Association controls and political views. Let us bear this in mind when we hear of opposition to government action, Let us not forget the statement made by the Right Hon. Mr. Ilsley in this house in 1947 when he said that for every $200 million we had spent on controls during the war it was estimated that the Canadian people had saved, either as consumers or as taxpayers, $2-| billion.


Mr. Sinclair:: What did he say two years later?


Major James William Coldwell: I am saying what Mr. Ilsley said at the end of the war when the operation was in his mind.
If my hon. friend thinks that is an extravagant statement, what about this one? Mr. Donald Gordon, who was chairman of the wartime prices and trade hoard, described the operation of subsidies and controls on Nov. 4, 1946, in these terms:
The payment of subsidies has meant a real saving to the people of Canada and has not been merely a transfer from one pocket to another.
Under a price control system, a subsidy paid to primary producers prevents merchandising costs from pyramiding as the product passes through the hands of the wholesaler and retailer to the final consumer.
The net result is that subsidies have cost the people of Canada, as taxpayers, far less than the additional prices they would have otherwise paid, as consumers.
That is Mr. Donald Gordon speaking. I have not heard that he wished to change that view.
In its report to the house the wartime prices and trade board said this:
The payment of subsidies distributes the burden of rising production costs according to ability to pay, whereas inflation distributes this burden according to the strength of one's bargaining power, with no regard to the financial need.
These statements are authoritative. They are not my statements, nor the statements of the C.C.F. party. They are statements of the

The Address-Mr. Coldwell Minister of Finance, the chairman of the wartime prices and trade board and the wartime prices and trade board itself. We say, therefore, that the use of subsidies can be warranted. Moreover, if subsidies now were accompanied by a reimposition of the excess profits tax, which brought in something like $460 million the last year it was in operation, most of the money required to meet the cost of subsidies on basic things like milk and so on could be obtained.
We are engaged in a democratic struggle to preserve those freedoms which we all value. It is an incontrovertible fact that one of the weapons of communism is inflation. It was used by the communists after the Russian revolution to bring about the downfall of governments in Europe. Even today their followers in this country have passed resolutions opposing price controls and subsidies and have forwarded them, incidentally, to some of the members of this house including myself. Why? Because Stalin and his friends know that they are not going to destroy the western democracies by war. They are going to destroy, if they can, by undermining our economies and bringing about the collapse of our economic and social institutions.
I am not pretending, and I say this to the Prime Minister, that everything can be done within the boundaries of Canada. It cannot. I believe this requires international action as well. There is some action which we can take within our own boundaries. The situation today is very different from that of 1939, when we had idle factories and hundreds of thousands of unemployed in the country. When we began our rearmament program early this year our factories were employed to capacity, and there was a shortage of labour. This, in part, accounts for the inflationary atmosphere at the present time in the western world.
There was recognition of this fact when the North Atlantic agreement was made. Our members will recall that we were insistent that, in addition to the military provisions of that pact, there be economic provisions for the integration of the economies of the co-operating nations. We were delighted when Canada suggested that, and subsequently it was put in the treaty. I am proud of the fact we suggested it. Now the north Atlantic alliance has recognized the need for economic integration, if you like, but has done very little about it. They did set up an international materials conference for the procurement and allocation of strategic materials to the free world. The purpose, of course, was to prevent stockpiling by any one nation, but unfortunately it failed in its objectives.


James Sinclair: Not all of them.


Major James William Coldwell: Not wholly, no, but to a very large extent. The seriousness of this problem was brought home to us after the outbreak of the Korean affair. The consequences to the economies of the western European nations, the British and ourselves, we know or should know. This stockpiling has been undertaken largely by the United States, but we have not been innocent. The prices offered and demanded by the United States for certain basic materials soared, as did the prices of some of our materials like nickel and newsprint. Those who controlled the tin cartel, the British and the Dutch, also saw that the price soared, defeating the very purpose of article 2 of the North Atlantic agreement. We say that we should now insist-I am glad that Canada raised this at the recent NATO meeting-on the proper planning of our resources and greater economic co-operation among the nations of the free world. No nation, not even the United States, is self-sufficient.
I was going to make some remarks on the extent to which the United States is not selfsufficient, but I cannot do so because of the lack of time. I am going to say that this lack of co-operation hampers our joint defence. This is unfortunate because we are, in so many respects, complementary to the United States and the United States is complementary to us. On another occasion I shall have something to say about the failure to bring about a balance in the defence purchases of our two countries. I shall also have something to say about the Geneva trade agreement and the United States unilateral action restricting imports of cheese, about which I was pleased to note the member for Coast-Capilano (Mr. Sinclair) had something caustic to say the other day.
If we are to solve the economic problems that arise out of the present international situation, there must be closer co-operation in the allocation of raw materials among the democratic nations. This requires both national and international planning, pooling, and hence intelligent and democratic controls. I said a moment ago there are some who resist controls because they say it is an interference with private enterprise. When we enact any law it is an interference with someone's private affairs. In this time of crisis it seems to me we have a right to protect our own people, and we have an undeniable right-indeed an obligation-to associate with our other friends in the north Atlantic alliance with a view to protecting the economies of the whole of the western world.
I must finish now; but let me say, as I have often said, that this is a matter of

urgent concern to all of us when we see the conditions in some of the western European countries today as the result of inflation. In France wages are lagging far behind and there is grave unrest. It is true, as the Prime Minister (Mr. St. Laurent) has said, that the British workers have shown a tremendous amount of restraint in not pushing wage demands which they could have done during this period. I believe it is a great tribute to them. The same thing applies to workers in other .parts of the world, but we cannot expect that kind of thing to continue indefinitely. Ultimately the struggle for progress will depend on the co-operative use of our resources and the standards of living everywhere, as well as the removal of poverty, misery and want wherever they exist. So I am going to put these considered views forward from our party on the international side:
1.	That Canada press in the North Atlantic Treaty Organization council for greater attention to the economic consequences of rearmament.
2.	That Canada, in partnership with the United States of America, greatly increase her direct contribution to economic aid to Europe and Asia.
3.	That Canada should, under present conditions, oppose increased military burdens which are likely to cause economic distress and international collapse, and which would thereby defeat the whole purpose of the alliance.
4.	That economic co-operation be promoted by Canada, under article 2 of the treaty, particularly in the pooling of essential raw materials and supplies, leading to a closer integration of the economies of the allied countries.
May I say that what I have said does not in any way imply that Canada should not fulfil her obligations under the North Atlantic treaty. Indeed, quite the contrary; although I saw in one of the newspapers this morning criticism of this statement, on the ground that the C.C.F. was going back on the position that it has taken hitherto. Not at all. What we are saying here is that there are nations which are less able to bear the impact of the burden of the defence of the democratic world than are the United States and Canada, and in order that we do not destroy the very basis of their	defence-namely,	their
economies-that when it is necessary and if it is necessary we should assume a larger share of that international burden for the defence of the free institutions that we have in common.
What we say is that more attention must be given to article 2 of the treaty, which
The Address-Mr. Low visualized the integration of the economies of the democratic nations in order that economic stability and progress might maintain the strength of the democratic alliance to resist threats of both economic collapse and of military aggression.
We believe that a real danger to the western democracies is the possibility that the present rearmament burdens and the high prices of basic materials caused by inflation, generated largely in North America, will weaken our European allies and undermine their determination to resist totalitarian aggression.
These, Mr. Speaker, are the main reasons I have emphasized the need for the control of basic materials and domestic supplies and have urged once more upon the government a consideration of intelligent controls and beneficial subsidies in the light of our experience during the war; because while we are not at war now, we are spending hundreds of millions of dollars on defence, a fact which makes this economy more like that of wartime than of peacetime.


Mr. Solon E. Low (Peace River):: Mr. Speaker, I should like to join with those who have preceded me in this debate in complimenting the hon. member for Beau-harnois (Mr. Cauchon) and the hon. member for Yukon-Mackenzie River (Mr. Simmons) on the exceedingly high quality of their efforts in moving and seconding the address. I should also like to join with those who have preceded me in expressing our sincere hope that His Majesty the King will continue to improve and that he will soon regain completely his health and strength. We are quite sure the Canadian people feel that it is a high honour to have amongst them at this time, and to enjoy their presence, Their Royal Highnesses The Princess Elizabeth and the Duke of Edinburgh. These young people are endearing themselves to the Canadian people wherever they go. The enthusiasm with which they are greeted bespeaks the firm attachment to the British crown which exists everywhere amongst our people. We sincerely hope that the remainder of their tour will be most pleasant for everybody and will be without unpleasant incident of any kind.
Mr. Speaker, we heard here this afternoon some very interesting addresses. I have been keenly interested right from the first words that were spoken by the leader of the opposition (Mr. Drew). With a great many of the things he said I find myself in full agreement. He covered nearly the whole field of important things that should be considered in this debate. I will not have as much time to
50	HOUSE OF
The Address-Mr. Low speak as he had; therefore I shall have to be more careful in my selection. I will not have a chance to speak about all the matters I should like to discuss. I therefore will cover some of the things that those who preceded me have dealt with; but if I do so, it certainly is not with any desire to repeat but rather perhaps to underline or to emphasize some of the matters and their importance, and to indicate that the position we take as an opposition in this house is indeed the position which the people of this country are taking. I believe that the opposition parties are much closer to. the people than the government appears to be. I believe that we are saying here today exactly what the people of Canada from one coast to the other would say if they were here. I think that unanimity is something which the government ought to take into consideration; and if it does not do so, of course it will be to their detriment.
In his address the leader of the opposition again asked for a committee of this house to be set up to examine into defence expenditures. We have taken our position with respect to that demand on several occasions before. We think that the government should be ready, by all means at their disposal, to reveal to us in this house all of the information that we require to enable us properly to determine the real situation with respect to our defence position. Whether that is by committee or whether it is by some other means, I am not prepared to try to determine this afternoon. We certainly support the request for the fullest possible information concerning our defence preparations and the costs thereof.
With respect to veterans' pensions, already mentioned by the two preceding speakers, may I say that we have always advocated that an escalator clause should be inserted in the Pension Act-we think that should have been done at the last session-which would keep pensions in line with the cost of living. We are pressing strongly that that be done at this session.
I should now like to say a few words about that part of His Excellency's address which has to do with old age security. The address declares that the primary reason for meeting in this session is to give consideration to increased security for our senior citizens, through universal pensions without a means test for those Canadians over seventy years of age. That may have been the primary reason for the government calling a session, but I think there are other matters that will have to be considered-matters that perhaps rank at least equal in importance with old


age security, important as we believe that to be. However, we are well pleased that government and public consciousness of the need and desirability of greater old age security has finally crystallized into action by this parliament. We are happy that at long last measures are to be enacted which will improve the lot of most of those Canadians over seventy years of age. It has been a long time coming. Many of the members of this house have been pressing for this type of legislation and these improvements for a good many years. The members of the Social Credit group, of which I have the honour to be the leader here, are among those who have been struggling for greater old age security for going on twenty years, and have made their demands well known inside and outside of this house. While we rejoice over the progress that has been made in this field, our satisfaction is tempered somewhat when we think of what happens every time a new social security measure is adopted by the federal government.
Old age security measures are just one phase of a war against poverty. Some of us at least-and I count myself and my fellow members of the Social Credit group here among them-have long since set our hearts on completely abolishing poverty from amongst Canadians, and nothing less will satisfy us. We are firm in our conviction that any country that is endowed with the wealth of resources, both natural and human, that Canada has been blessed with, need not be plagued with poverty amongst any group of our population. We can-and I think we have demonstrated it in the past-produce in quantities sufficient to guarantee a high standard of living for all our people, but we have not yet by any means solved the faults and the problems of distribution. Our failure to do so has been very largely because so many of our people, including those in high positions in government, and in the civil service-perhaps I had better say especially those in high places in government and in the civil service-have clung tenaciously to outmoded ideas.
I find myself in quite thorough agreement with what Bertrand Russell had to say in one of his broadcasts recently from Britain. I do not remember exactly the words he used, but he expressed the thought that most of the trouble in the world today could be traced to hanging on to ideas that no longer fit the situation. Our whole economic system is based on a philosophy of scarcity. This we have brought before the house on numerous occasions prior to today. The truth is that the whole idea of scarcity throughout the whole world, and particularly right here

in America, exists only in men's minds. There is not the slightest well-founded reason for scarcity at all. The only real scarcity that does exist is due to plain stupidity and nothing else.
I know it is difficult to change the thinking of individual people, and particularly individuals in high places in government and in the civil service. The attempts that we make, we people who call ourselves reformers, are made a lot more difficult because so many of the educators who mould the thinking of the people, and particularly young people, always teach admiration for the type of character who would be successful in commerce. I have had it drawn to my attention ever since I started school. It has been said to me: What you ought to become, young man, is the kind of character who is successful in business, in commerce. Bertrand Russell says that that is the type of character who would make a successful bandit leader. When I look over the situation in Canada today I am compelled to agree that Bertrand Russell was almost completely correct. The thinking of individuals will have to be changed if the threat to our security from false ideas is ever to be removed.
Specifically, this idea of scarcity must be replaced by more realistic thinking in terms of abundance if we are to abolish poverty from amongst the Canadian people without enslaving them in the process. I want to emphasize the latter part of what I have said: if we are to abolish poverty from amongst the Canadian people without enslaving them in the process. I want to ask this question: Is it not a fantastic thing that whenever the government is pressed into taking a step that is designed to abolish some of the poverty existing amongst any section of the Canadian society, they cannot think of any way to do it except by piling on heavier and more ruthless types of taxation. The power to tax is the power to destroy. Taxation never at any time stimulated increases in productive effort. On the contrary, it encourages, and has always encouraged, less productive effort. It discourages all-out productive effort. By taxation men are progressively becoming slaves to a super state. Does it not seem queer that Canadian scientists and engineers have conquered the forces of the earth, the sea and the air, and have performed miracles such as would astound our fathers if they were here to see them, but no one in a responsible position has as yet successfully bent his efforts to the task of abolishing poverty from our midst without enslaving the Canadian people? That is a question we should ponder very carefully in the days to come.
The Address-Mr. Low
I want to warn all my fellow Canadians, including those here in this house, that if they want to preserve their liberties they will have to go slow in their demands for further social security until some of the outmoded ideas have been knocked out of the heads of some of the stinkers in high places, in government circles. We probably will have much more to say about this whole matter when the old age security measure is before the house.
I should now like to turn for just a few minutes, Mr. Speaker, to a consideration of the question that has been uppermost in the minds of all the speakers in the house today, namely, the question of the high cost of living. I was delighted with the contributions made by the various speakers, including that made by the Prime Minister (Mr. St. Laurent), because he certainly gave us something to think about this afternoon. In view of his position I must compliment him because he rose and dug into the task as he did. He got down and swam right around in detailed information which this house should have. I quite agree with him that we should not attempt to deal with these things unless we have all the information before us. For that reason the Prime Minister's contribution was quite significant to me.
I think perhaps the major plague of the Canadian people today is the high cost of living. His Excellency's address makes reference to it in one short paragraph, which has already been quoted by the leader of the opposition (Mr. Drew), in these words:
The concern of our people over the rising cost of living resulting from international and domestic inflationary pressures is fully shared by the government. Every measure will be taken which my ministers believe will be effective in counteracting inflation without impairing our free institutions. The anti-inflationary measures already in force have checked the upward trend of prices of goods and services affected by their operation.
Well, now, I think the government is concerned, but not nearly as much about the rising cost of living as about maintaining the status quo. That has been my conclusion as a result of studying what they have done. They are certainly concerned about maintaining the unimpaired status of certain institutions in Canada, and about preserving unchanged a thoroughly discredited financial system. They are much more concerned about these things than they are about getting at the root causes of our ever-increasing cost of living and doing something effective about it. I think I am perfectly correct in saying that maintaining the position of certain institutions and systems in our country seems much more important to the government than does the welfare of individual human beings.

The Address-Mr. Low
The last part of the paragraph I quoted from His Excellency's address is, I think, a complete misstatement of the fact. The fiscal measures to combat inflation which were adopted by the government have been a dismal failure in so far as controlling prices is concerned. Since the Minister of Finance (Mr. Abbott) announced the first of these fiscal measures, the cost of living index has zoomed up no less than 18%o points. That, it seems to me, ought to be evidence enough that the government's fiscal measures have failed utterly to check the steady rise in consumer prices, much less to bring prices under control.
It is a fact that certain aspects of the antiinflation program have contributed directly to higher selling prices, as well as to the highest cost of living index in our history. A case in point is Mr. Abbott's commodity taxes. He gives them that genteel name "commodity tax", but the fact is that they are hidden taxes. They are known by such names as the sales tax, the excise tax, and perhaps customs duties. By applying these taxes at the manufacturers' level the government pushed prices up. And that is not all; in many cases they pyramided prices beyond all reason.
I should like to point out to the house that the net effect of the 10 per cent sales tax is to cause the consumer to pay up to 60 per cent more in taxes than would be necessary if the same rate of tax were applied at the retail level. I am prepared to use specific examples which I have obtained from manufacturers to prove the case, if that statement is challenged.
I should like to repeat, because it is significant and important for the Canadian people to know, that the net effect of the 10 per cent sales tax is to cause consumers to pay up to 60 per cent more in taxes than would be necessary if the same rate of tax were applied at the retail level. That can be proved.
A look at the progressive rise in the cost of living index shows that immediately after the introduction of the 1951 budget, that is during the months of May, June and July when the budget provisions were being applied to the Canadian economy, the cost of living index rose by 7 points. The excise tax increases and the 25 per cent increase in the sales tax provided the main pressure for the price rise during those months; I think there is no question about it.
The government has chosen to rely almost exclusively upon taxation to combat inflation; and that in the light of the fact that many economic authorities think that taxation, unaccompanied by subsidies and, perhaps, rationing, cannot possibly check price rises under conditions such as those in Canada


today. This was drawn to the attention of the Minister of Finance during the budget debate last spring. I did so, and I recall that at that time other Social Credit speakers did so, and perhaps others as well. The Minister of Finance chose to ignore this fact, and proceeded to put his whole trust in his taxation measures. He created an extraordinary measure of discomfiture and suffering on the part of many thousands of Canadian people.
Another budget provision which has contributed to the increase in the cost of living since last spring is the unabated corporation income tax increases. The Minister of Finance was warned by a great many in the house that if an abatement provision was not provided, those corporations classified as utilities, such as railway companies, telephone companies and power companies, would be forced to apply for increased rates. The minister failed to keep his promise to insert an abatement clause in his budget. Consequently, almost immediately after the budget was introduced in the House of Commons utility companies did apply for higher rates, and gave as one of their reasons that they were forced to do so in order to pay the increased taxes imposed upon them.
Here again the Minister of Finance was hiding a tax so the Canadian people could not see it. That is, he simply compelled the utility companies to collect taxes for the government which the government was afraid to apply directly to individual citizens in this country. Increases in telephone rates, and in electric power rates as well as freight rates, do contribute to price increases throughout the country. They have already contributed to increased prices by the fact that the railways were recently granted a 12 per cent increase in freight rates.
Another way the government has contributed to the high cost of living is that it has failed to adopt an effective policy covering investment and expansion and development in Canada. At least some of the expansion and development of Canadian industry and resources during the past few years has had about the same effect on prices in Canada that war has had upon them. Whenever huge profits are plowed back into plant expansion without soon bringing an increase in consumer goods available to the people of Canada, it is inevitable that inflationary pressures are set up which push up the cost of living. The immediate effect of capital plant and resources development is to divert materials and power from ordinary consumers, and it raises either prices or taxes, or both. But of course development differs from war in that ultimately it does raise the standard of living, if the government does not discourage the

increase of consumer goods production which that development makes possible.
I would say that a good deal depends upon the word "ultimate". Some expansion projects give returns within a relatively few years, and they can be justified; others are likely to be of use only to future generations, and are therefore a dead loss so far as this generation is concerned. This generation of Canadians-you and I, and our fellow Canadians-has inherited rich assets in the form of abundant resources. It is only right that we pass on to our children and grandchildren an increase in those resources, wherever possible, but it is not necessary or desirable that the increase should be very great in so far as it is done at the uncompensated expense of this generation. I believe there is a reasonable rate at which development and expansion should be undertaken. An excessive rate is plain robbery of the community, because while the development is going on our people are forced to pay higher prices for their living and higher taxes to government, without getting any benefit of increased production of consumer goods at all.
The Liberal government has failed dismally in its responsibility to the Canadian people with respect to the management of investment for expansion and development. I brought forward at the last session what I thought, and what many people thought, was a perfectly sound suggestion, by which some of those undistributed profits of corporations might not be plowed back immediately into expansion. But the suggestion was turned down. I presume the government had other ideas. The fact is that since 1946 the rate of increase of prices in Canada has accelerated out of all reason. Much of this increase in prices has come from the unnecessary exploitation of the Canadian people through the very process of taking large profits and plowing them back into expansion and development, without giving the Canadian people the benefit of increased production of consumer goods.
I maintain that it is an urgent matter now that some specific policy be laid down governing future development and expansion programs. The criterion by which they should be judged, in my opinion, would be this, that any development program should be authorized only after a proper analysis of its purpose and cost has been made, and after it has been determined that one of its results, at any rate, will be an early reduction in the general price level, at least until that level has been brought down to or near the 1939 level.
The government tries to excuse its comparative inaction by saying that the present
The Address-Mr. Low price situation is a world-wide phenomenon. Up until late spring I noticed that many of our cabinet ministers were quite ready to blame high Canadian prices on those in the United States. A good deal has been said this afternoon by way of comparison of prices in Canada with those in the United States. I was keenly interested in what the Prime Minister (Mr. St. Laurent) had to say in reply to the statement of the leader of the opposition (Mr. Drew) that the Canadian price index has increased above that of the United States. I believe him, and I have reason to believe him. I think it was very unfortunate that the Prime Minister (Mr. St. Laurent) did two things this afternoon. First of all he selected a centre in the United States that represents perhaps the very highest price centre that you can get anywhere in that country, and used it to compare with prices here. I am sure if he had selected an average of prices across the United States he would have found quite a different level.
I had the privilege of travelling across the United States twice this summer, and while I travelled through the east, middle west and western United States I took the trouble to investigate prices for myself. I did not depend on newspapers at all. I investigated prices in the stores, bought things to eat for myself and priced things in which I was interested. I think the second unfortunate thing that the Prime Minister did today was that he only selected foodstuffs for comparison. If he had gone to the trouble of selecting other things such as machinery, tools for making repairs, clothing, furniture, household equipment, and all those things to which in Canada have been applied such dreadful and foolish commodity taxes, he would have found quite a different story.
I found, for example, in my travels across the United States, taking an average of different areas, that most foods would average about the same price in the United States as in Canada, although I was quite surprised to note that I could buy grade A eggs at 54 cents a dozen just ten days ago as I came through the middle western United States. I could not help thinking of the 84 and 86 cents my wife was paying in Ottawa. Butter was approximately the same price. I admit that what the Prime Minister said about milk is probably true. The average across the United States was around 20 cents as I found it, because I do buy milk to drink, and of course that would be about 24 to 25 cents here.
That is quite correct, but when I got into other fields like fruits and certain vegetables I found that prices there were much lower than they are here. Furthermore, when I investigated the price of clothing I got the

The Address-Mr. Low shock of my life. If you want a real comparison just take a look at the prices of cotton goods in the United' States and compare them with prices here. Take the prices of men's shirts. If you want another shock take a look at the tools used by farmers and mechanics to make repairs'. They are 20 to 25 per cent lower in the United. States than they are here. Electrical goods run up to 75 to 80 per cent lower than they are in Canada, and there are so many other things I could quote which enter into the day to day cost of living in the United States. I am satisfied that what the leader of the opposition (Mr. Drew) has said is quite true, that the cost of living index today in the United States is lower than it is in Canada.


Stanley Howard Knowles: And wages are higher.


Solon Earl Low: Wages are higher. I do not think there is any question about that when you consider the whole range of things that enter into the cost of living index. The government sort of excuses its position on the ground that the cost of living index in Canada is no higher at any rate than it is in the United States, and they say further that this is no time to apply a system of direct price controls. They go further and say that it would have to be an over-all system including wage controls, and that even such a comprehensive system would not work now. I am not going to quarrel with that declaration by the government, but I want to set out our position quite clearly.
We Social Crediters are convinced that a system of over-all direct price controls, with all the regimentation and restrictions it entails, is the very negation of the democratic way of life. That is the first point. We further believe that as long as Canada continues to participate in the numerous international organizations to which she is now committed, such as NATO, Bretton Woods, the United Nations, the Colombo plan, and so on, the cream of Canadian production is likely to be given away externally, leaving in our country effective demand for which there is no balancing supply of consumer goods. In that situation pressures for price rises are inevitable, particularly if large corporations continue to pile up inventories so that those goods are not released to the Canadian public. It is our conviction too that as long as we continue to operate under the present financial and economic system this country cannot maintain a condition of full employment, even in peacetime, without some price control arrangements. Until proper financial and economic reforms are established in Canada to take care of the situation on a long-term basis, it may be necessary to adopt certain price controls, as has been advocated

by both opposition speakers who have preceded me this afternoon. We would support such a temporary measure, and note that I say "temporary"; I am quite sure that the leader of the opposition at any rate, and I think perhaps even the hon. member for Rosetown-Biggar (Mr. Coldwell), would agree that it should be a temporary measure, to bring our people relief from the present terrific high cost of living until we can get things balanced down to a decent level.
In my judgment there are other perfectly scientific and economically sound things the government can do to ease the cost of living burden and bring relief to millions of our Canadian people. We strongly advocate the following measures:
1.	Overhaul of the taxation structure. We feel that the government ought to abolish or reduce in rate those taxes which are found to pyramid consumer prices. Particularly we advocate removal of the sales tax, an abatement in income taxes on public utility corporations, and the reform of the fiendish income tax enforcement policy as it has been applied to western farmers. Wherever any tax policy is found to discourage all-out productive effort, it should be revised to remove the discouragement.
2.	We advocate holding out every possible inducement to all sections of Canadian society to increase their productive efforts. We believe that the greatest single factor in bringing down the general price level is a plenteous supply of consumer goods for home consumption. Let me make that clear; a plenteous supply of consumer goods for home consumption, not piled up in somebody's inventory, not produced to send to some other place, but a plenteous supply of consumer goods for home consumption.
3.	We believe we should couple with a wise taxation policy a system of consumer price discounts or subsidies on selected items which enter into the daily needs of the majority of Canadian people. The Prime Minister said something today about the history of subsidies in the United Kingdom. Again I think it was rather unfortunate that he did not say at the same time that the subsidies applied in Great Britain are largely on things which they have to import, of which they produce not enough for their own people. It is a different matter when you apply subsidies to things you have to import than it is to apply subsidies to things that you produce in your own country and can produce in abundance. Let us take eggs, for example. I think it is certainly a reflection on the intelligence of the Canadian people today that we find ourselves in the position that we have to import eggs into Canada for the first time in our lives.


Mr. Major:: That was the result of too low a price previously.


Solon Earl Low: I quite agree with you, and whose fault was that? The Liberals. It was only Liberal policy that did it. There is no question about that.


William Joseph Major: What you are advocating now is low prices.


Solon Earl Low: I am suggesting now that if the government had been aware of what was going on, or had cared, it would have been a simple matter to use a temporary subsidy at least to enable consumers to get eggs at a more reasonable price but keep the price to producers at a level sufficient to induce producers to produce more eggs.


William Joseph Major: To whom would you apply the subsidy?


Solon Earl Low: It could be applied to consumers and producers alike, just as we did with milk during the war.


William Joseph Major: You had subsidies before and when they were taken off the price was so low that it affected production.


Solon Earl Low: I think perhaps the hon. member for Glengarry (Mr. Major) is all wrapped up in eggs. I hope he will get up and throw a few of them when it comes time to debate this matter. He has some good ideas. He knows what we did with milk during the war, and that could be done with good effect with selected items that enter into the cost of living of the Canadian people from day to day. We could certainly make it possible for them to buy more of these things by the use of subsidies or price discounts such as I have suggested. If they could buy more the demand would increase and the farmers or producers would meet that demand. There is no questioning that fact.
It is quite true that there is a difference between applying subsidies in Canada to things we can produce in abundance and applying subsidies to things in Great Britain of which they cannot possibly produce enough for their people. That is what surprised me when the Prime Minister (Mr. St. Laurent) made his statement.


George Alexander Cruickshank: What about peaches in the Peace river district?


Solon Earl Low: By George, I am going to tell you something about that. The British Columbia fruit growers' association attempted to take me to task because I had decried the stupidity of people who would allow peaches to go to waste, tons and tons of them, at a time when the people on the prairies were not able to get them. They wired me to the effect that they had incontrovertible
The Address-Mr. Low evidence to show that thirty thousand packages of fruit had been distributed in my constituency, the Peace river, of which ten thousand were peaches. I have determined that a package of peaches is a crate containing approximately three dozen. There are seventeen thousand families in the Peace river country and the fruit growers' association of British Columbia were sufficiently interested to see that each family in the Peace river country got about 24 or 25 peaches. Does that sound like decent distribution? At the same time I saw with my own eyes perfectly good fruit going to waste at Summerland and in various parts of the Okanagan.
Subsidies intelligently applied would have permitted the people of the prairies to buy that fruit at a decent price. It would have been possible for the producers to sell every crate of fruit produced without depressing the producer price one bit. In fact, that would make it possible for those producers to sell a lot of fruit they are unable to sell now. That is the situation. I claim that a set of intelligent subsidies upon selected items would go a long way toward reducing the cost of living.
Our fourth suggestion is that whenever it becomes necessary to expand the money supply of Canada the government should not add to the debt burden on the people by borrowing from the chartered banks. Rather the government should ask its own treasury and the Bank of Canada to create and hand over the new supply of purchasing power, interest free, to be spent into circulation by the government for the essential needs of the situation.
The fifth proposal we make and which we think the government should adopt-I have pleasure in noting that the throne speech does mention certain measures that are to be taken at this session-is the institution of a wise policy of control of combines and monopolies so as to ensure a full measure of economic competition in Canada which we think is most important if we are to bring prices down to a reasonable level.
As a sixth point we think there should be a wise and fair investment policy governing industrial expansion and resources development.
I shall take just a moment to say something about a matter which has been very close to my heart and in my mind for years. I refer to the matter of taxation which I have discussed to some extent in connection with the high cost of living. I have said already that the government's taxation policy has contributed to the high prices which

The Address-Mr. Low Canadian people have had to pay for the things they need. There is much more that could be said, but I shall confine myself to making one or two observations which have been running through my mind for some little time.
People generally throughout Canada are seething with dissatisfaction over the taxation policy of this government. I do not think that that is an overstatement in any respect. Their dissatisfaction mounts daily as they realize that the ministers of the cabinet are confiscating by way of taxation much more this year than the government needs for the defence effort and the maintenance of services. We challenge the moral if not the legal right of the Minister of Finance (Mr. Abbott) to overtax the people of this country in this way, especially at a time like this when they are burdened with the highest living cost in all history. We challenge also the manner in which they are overtaxing the people. I refer to the method used which contributes directly to higher consumer prices.
The government's taxation policy, especially their hidden taxes, is denying the people of this country the advantages of technological advancements. Lower consumer prices should follow as a consequence of the discovery of better, faster and cheaper methods of production. But the people are not getting these lower prices because whenever our inventive genius discovers better methods and better materials to overcome production costs, the government rushes in and slaps on hidden taxes which more than offset the saving. The result is that prices are pushed up again, and that is not right.
Moreover, our Canadian people are becoming absolutely fed up with seeing their United States neighbours able to purchase automobiles for $500 to $700 less than they have to pay for the same cars. They are absolutely fed up with seeing their neighbours in the United States able to purchase electric refrigerators, stoves, in fact all kinds of electrical supplies and many other goods much more cheaply than they can in Canada. There is no real reason why Canadians should have to pay up to 60 per cent more for some of these amenities and necessities than do our brethren in the United States; no reason at all except the government's foolish hidden tax policy.
Another feature of the government's taxation policy is that it has been discouraging an all-out productive effort. I refer more particularly to what has happened in connection with income tax enforcement among western farmers. People everywhere in the west are

fed up with the way they are being chased by income tax inspectors. This summer I saw a large number of people throughout western Canada. Some of them pointed out to me abundant acreage of feed and asked if I wondered why they were not producing livestock to eat up that feed. They told me that livestock production was largely a matter of overtime effort. We have in mind the experience of the long years of the war and after the war. As a result of being forever on an all-out production effort and raising livestock in overtime, we were then pursued down the years until this very moment by the income tax inspectors, who were forcing us to pay to the government practically all that we gained through our overtime work. We are not going to do it any more. Whether or not that is correct, the fact remains that in the minds of a good many western farmers there is this question. Why is it that the government was quite prepared to declare an amnesty, let us say, to deserters from the army and those who absented themselves illegally from military service-it was done almost immediately after the war-yet they continue to harry the farmer for the last cent of income tax which they did not know they owed. For years many of these farmers thought they had paid every penny of their income tax. This summer one of them came to me with this story. He said he had recently received a nice letter from the income tax division in Edmonton which went something like this:
Dear Sir:
Examination of your income'tax returns for the past five years shows you owe us for 1946 a balance of 84 cents. Will you please remit this together with a $5 penalty?
The department proceeded to harass him to get that, and I imagine they spent five or six times as much as the tax was worth to get it. This is not the sort of thing, Mr. Speaker, which inculcates confidence in the people. Surely it was not the fault of the taxpayer that the department was five or six years late sending him a notice that he had not paid. It was the inefficiency of the income tax branch that let it drag on for five or six years. Under those circumstances the government ought to be able to strike a cut-off date and say that from that date forward everyone will be treated alike. They could help provide the means whereby the taxpayer would know what his taxes really are. I believe the government would be well advised to look into that business. It is nothing less than fiendish the way income tax measures are applied. These people in western Canada are feeling the pinch, and in many respects they are relaxing their production efforts when we need all-out production.


Mr. D. S. Harkness (Calgary East):: Mr. Speaker, I should like to join with other members who have taken part in this debate today in congratulating the mover (Mr. Cau-chon) and seconder (Mr. Simmons) of the address. They both made fine impressions. I should like also to express my own happiness at the rapid recovery of His Majesty from the operation he had to undergo, as well as the pleasure I experienced in meeting the Princess and the Duke of Edinburgh during their visit here. I know many millions of Canadians will have that pleasure before the tour is completed.
Before mentioning some matters upon which many members will not be in entire agreement with me I should like to make a suggestion on which I think there will be complete agreement by all those in this chamber. As probably many hon. members know, the first battalion of the P.P.C.L.I. has been stationed in Calgary since the last war. During the last two or three weeks they left for Korea to relieve the second battalion of that famous regiment. The second battalion has made a record of achievement in Korea of which we can all be proud. It is a record which I am sure the first battalion will maintain and embellish. The commanding officer of the first battalion, Lieut. Col. Norman Wilson-Smith, saw me two or three days before he left for Korea and asked me about the procedure in securing Hansard, the price of a subscription, and so forth. He said he wanted it for use in N.C.O. schools in connection with the preparation of talks which are given to the men. I was pleased to tell him that I would be delighted to send it to him. However, my suggestion is that Mr. Speaker, representing all of us-which he always does in such a distinguished manner-arrange for copies of Hansard to be sent to all the army, air force and naval units which are posted overseas. Apparently some units desire to have copies.


George Alexander Cruickshank: I shall send them all my speeches.


Douglas Scott Harkness: I do not think these people would read the hon. member's speeches in Hansard, but apparently they do wish to read the speeches of some hon. members. I hope that suggestion might be acted upon in the near future.
Undoubtedly the matter which has been uppermost in the minds of the Canadian people has been the cost of living. This is illustrated by the results of recent public opinion polls. These polls corroborate the personal experience of every member in this house. It is the question that everyone
The Address-Mr. Harkness brings up, and about which everyone complains. About six months ago the public opinions polls showed that the threat of Russia and the measures forced upon us to counter that threat were the greatest worries of our people. The Russian menace, Mr. Speaker, is still the most dangerous we have to face. To the extent that inflation and rising living costs have caused people to forget that fact, in my opinion the Russians have gained a victory.
We need to constantly keep in mind that Russia and her satellites constitute the number one danger to our national existence, our free political institutions and our economic system. The number two danger, however, is undoubtedly inflation and the suffering and chaos it can produce if allowed to run wild. The difficulties and actual suffering it has already caused for many people are all too apparent. There is an old saying that everyone talks about the weather but nobody does anything about it. This saying could apply equally as well to inflation and rising living costs in Canada today. So far as most of our people are concerned, there is nothing constructive they can do about it. So far as the government is concerned, it has been singularly lethargic and inept in the few doubtful steps it has taken to try tb curb inflation.
The credit restrictions have had, as their most apparent effect, a drastic reduction in the amount of housing constructed and the creation of what the government calls "pockets of unemployment". Apparently the government proposes to deal with these pockets of unemployment by shipping the unemployed workers across to the United States or making it easy for them to go to that country. Surely, Mr. Speaker, that is a most shortsighted policy, since the government itself has stated repeatedly that this country's greatest need is more people. This is being done at a time when we have an expanded and assisted immigration program. This does not make sense.
The other chief measure the government took was to increase the sales and special excise taxes at the last session of parliament. They have had the inevitable effect of forcing up the prices of all goods to which they apply; and they are, of course, the majority of those we have to buy. In his speech this afternoon the Prime Minister (Mr. St. Laurent) attempted to show that prices are higher in the United States than in Canada. He said: "Apart from all cost of living indexes and everything, that is what I actually found". I was glad to hear that he had been making some personal investigations as to the cost of

The Address-Mr. Harkness living. I think the trouble is that he did not carry them nearly far enough. As has been already indicated by the hon. member for Peace River (Mr. Low), Washington and New York are, I believe, the two highest priced centres in the United States. Apart from anything else, the prices taken in one store in Washington do not give any sort of indication of what prices are across the country. There is an old saying that one swallow does not make a summer.
The Prime Minister's experience was directly contrary to my own and to that of every person with whom I have talked who has been travelling through the United States in recent months. The unanimous opinion I have received from them is that prices there are lower on practically all goods. Milk is one exception. But the Prime Minister, as has already been indicated, mentioned only food. However, if you go into the field of electrical appliances of all sorts, kitchen appliances of all kinds-refrigerators, stoves and so on-or if you go into the field of clothing, you will find that prices in the United States are very much lower than they are here. I have not a list of these prices, but I think everyone's experience will bear out that statement; and it is easy to corroborate it by securing a few United States papers and looking at the advertisements in them.
However, when we come to food, upon which the Prime Minister made his case, as far as I could see-and an extraordinarily poor case it was, I thought-after he had finished speaking I went into the library and obtained the advertisements of a food store from two issues of the Detroit Free Press. This issue is for October 8, and here are the prices which are advertised there. The Prime Minister took coffee as an example and there was quite a bit of talk about coffee. He established that coffee-their own chain store brand-was being sold by A & P at 96 cents in Ottawa. In this same paper the A & P stores were advertising their own brand of coffee at 77 cents a pound, a difference of 19 cents a pound for that one particular brand. Here is the advertisement of another of these supermarkets; Big Bear Markets, it is called. They advertise coffee for 75 cents a pound. It is packed in a vacuum can, not one of these paper ones. That brand is White House coffee. Then we find that Blue Bonnet margarine is advertised at 27 cents a pound. I have not before me what the price is here, but I know that it is over 40 cents a pound.


An hon. Member:: Forty-four cents.


Douglas Scott Harkness: My hon. friend says that it is 44 cents a pound. That is just getting on

toward twice the price for which it is advertised in the United States. If we look at some of the other advertisements we find that bacon in the slab is advertised at 49 cents a pound; bacon squares, 31 cents per pound; smoked hams, 12 to 16-pound hams, full shank, half a ham, 53 cents a pound; lean, short shank, fresh picnic pork roast, 4 to 6 pounds each, 45 cents a pound; frying chickens, 59 cents a pound; lamb roast, 65 cents a pound; potatoes, 10 pounds for 35 cents; butter, 77 cents a pound; Velveeta cheese, 2 pounds for 89 cents.
In the very short time I had at my disposal I looked over some of the advertisements of some of the local chain stores such as Dominion, A & P and so on; and in them I have not found one price as low as those advertised in this Detroit paper. As I say, that only serves to confirm the experience of all the people with whom I have talked, and my own experience in travelling through the United States. I think there is no question but that, even as to food, prices are lower there; particularly when you come to things like fruits and fruit juices, prices are lower there than they are in Canada. When you come to manufactured goods of any sort, prices are much lower there. Any attempt, on the basis of the prices of groceries and meats in one store in Washington, to show that prices are higher in the United States than they are here I think is a bit feeble.
Like the Prime Minister, I have been doing a little bit of personal investigation of prices in the last little while, and have been trying to get at what people actually were paying for different goods. I have a few suggestions to make which, if carried out, I think would have at least some hope of helping to bring down the prices of goods; and these are not suggestions which go into any sort of detailed price control or anything like that.
I think that one of the difficulties in this country at the present time is that a large number of people, when they think of bringing down prices, think of only one thing, namely price control, and that there is no other remedy. It may be that the situation is getting so desperate that this will be the only remedy, but I think there are numerous other remedies which could be pursued and which have some hope of success. I should like to indicate one or two of them.
In order to do this, I propose to go in some detail into the costs, at various levels, of one product with which I have a certain amount of familiarity. I have chosen it primarily, however, because meat is the commodity which, above all others, causes complaint having regard to the cost of living. There is nothing about which there is so much

talk as there is about the price of meat. I am therefore going into the cost of pork at different levels.
In the matter of the cost of meat nearly everybody in the city blames the farmer. The farmer in turn blames the packer. There are not so many packers, so I have not run into any of them and I do not know whom they blame, but I have no doubt that they blame somebody. In any event, everybody blames somebody else; and the situation is that when the consumer buys a dollar's worth of pork or any commodity, he actually does not know how much of his dollar is going to the producer, how much is going to the processor, or how much is going to the retailer. I think the consumer has the right to that information, and that some effort should be made to give it to him. I will say something more about that later.
It is very difficult to arrive at any average cost of production to the farmer of his pork-of his raising it and so on-the cost to the processor and the cost to the retailer. However, I have attempted to do that on the basis of figures available from the dominion bureau of statistics, from newspapers and so on; and I think I have arrived at figures which are reasonably accurate. I am not for a moment saying that they are completely accurate, but I think they are reasonably accurate and reasonably close to the situation.
The first thing we need to do is to determine how much it costs the farmer, in an average case, to raise his pig. I am not going into all the figures involved in this matter. I am going into them only enough to indicate how I got them. Take the cost of breeding and feeding the sow. I have made the assumption that the farmer will receive two litters a year from his sow, and that he is able to market from these two litters an average of seven each, which is better than the national average; in other words, fourteen pigs. Now, as to the cost of feeding the sow for a year in this area, I have taken the figures for Ontario and the Ottawa area, which are not less than 25 cents to 30 cents a day. Therefore we take as a rough cost $100 a year to feed the sow, and $4 is a share of the cost of maintaining the boar. From these figures you get $7.42 per pig when it is born. You have to add on another 8 cents per pig at least for the cost of oxide of iron and worming powder and the other things that have to be given to young pigs; therefore you get roughly $7.50 a pig.
According to the experiments of the university of Alberta experimental farm it takes on the average-and I will not go into it now, but I would refer anybody interested to the pamphlet called "Swine Production, Alberta" put out by the faculty of agriculture
The Address-Mr. Harkness of the university of Alberta-450 pounds of grain or its equivalent to make a hundred pounds of pork. Therefore to bring your pig up to 200 pounds it will take 900 pounds of grain or its equivalent. Today No. 1 feed oats are selling in Toronto for $61 a tqn, No. 2 feed barley for $63.50 a ton, and supplements range from $5 a hundredweight up. Therefore the cost per pound of feed to the farmer in this part of the country is certainly not less than 3J cents for the 900 pounds. That would give him a total of $31.50 a pig. The total amount of money actually paid out for feed, not for anything else, just money actually paid out for feed, would be $39. On October 6 the price of a good quality hog, according to the livestock and meat trade report, was about $30 a hundred pounds. We will say his pig dresses at 155 pounds, which would be the average. He would get a return of $46.50, leaving him $7.50 to cover all his expenses and overhead in connection with it, the cost of repairing his fences and his buildings, the cost of transporting the grain to his farm and the pigs to market, the labour of his hired man if he has one, or to pay for his own labour if he has not one. Therefore the farmer gets for the year's work, 365 days a year, $7.50 per pig that he markets. Of course, the more pigs he has the more total profit he will have; there is no question about that. However, I will leave it at that point. I think these are very favourable figures. I doubt whether a very large number of farmers could hit them.
I telephoned to Canada Packers in Hull and found that last week, which would be the time on the basis of the prices of October 6 that a pig would be coming on the market, the price for a pork carcass with the head on, the kidneys in and so forth, was 38 cents a pound. The dominion bureau of statistics told me that the figure at Toronto for the same carcass was 36| cents. However, I took the 38 cents local price. That means that the young pig when it was dressed would be down to 150 pounds. You have a shrinkage of 5 pounds from the hot weight dressed as compared with that on which the farmer is paid. The packer would sell that same carcass say for $57, which gives him a margin of $10.50 for his work in killing, cutting and refrigerating, distributing it to the butcher and so forth. In other words he gets $10.50 for having the pig in his hands a comparatively short time after killing. To cover his labour costs, his overhead and so forth the farmer got $7.50 during the same week in October, and both got their profits out of it.
When we come to the price at which it is sold by the butcher the thing is more difficult still. However, I got from the Department of Agriculture the last dominion cutting test, which shows the percentage of the pig which



The Address-Mr. Harkness would be loin, the percentage of ham, the percentage of shoulder and head and so forth, and worked it out from that; and the average prices in the stores on Saturday last that they would get for that pig. One of the surprising things which refutes what has been said to me in the last week, namely, that there is no competition, is the variation in the prices for the same sort of cuts. There may be some variation in quality, but I do not think there is much because Canada Packers quoted only one price for a carcass. There was no distinction between A-l and B-l, or the light or heavy pig or the sow. The carcass was so much and that was all. In any event, I will just read a few of these figures to show a variation in price for the same cuts of the same quality. I begin with loin of pork. The lowest price was 65 cents, the highest 75 cents; leg roast, which is the ham, the lowest price was 53 cents, and the highest 75 cents; shoulder roast, the lowest price was 47 cents and the highest price 65 cents; chops, the lowest price was 74 cents and the highest price 89 cents. I will not go on with any more of these, but they give some indication of the variation.
Under these circumstances I took the prices at one large chain store, a store in which some of the prices were the lowest and some were not the lowest, but at any rate I took all their prices and I figured out what they got for the pig on the basis of it. Once more I will indicate only how I arrived at the total figure. Shoulders constitute 16 per cent of the weight of the pig, which makes 24 pounds of the 150-pound killed dressed weight. I put them in at the lowest price, 47 cents, which makes $11.28. I did the same with all the rest of the pig, and it gave a total of $74.16. The packer received $57. This gave a margin to the retail butcher of $17.16, which is a percentage margin on his cost price of just over 30 per cent.
However, if we turn to the highest prices which were charged-and I put them down to get at what was the highest price being charged for this same pork-and work it out on the same basis we get the total price received for the pig of $87.20, or a margin to the butcher in that case of $30.20.
What emerges from all this, Mr. Speaker, to more or less recapitulate, is that the farmer receives $7.50 for his total overhead and labour on the sale of one pig. The packer receives $10.50 for his services in killing the pig, refrigerating it and so forth, and the retailer receives from $17.16 to $30.20 or more for cutting it up and serving it to the consumer. I have left out of consideration such cuts as tenderloin which were selling for from $1.20 to $1.30 a pound and so forth.


An hon. Member:: What about spareribs?


Douglas Scott Harkness: No; I have spareribs, but tenderloin is not in the cutting test. It is included apparently with the loin. At any rate, I am convinced that the prices I have given so far as the retailer is concerned are actually less than is being received when you add in some of these higher cuts.
Pork chops are shown at 75 cents a pound. They are not shown on the cutting test because, of course, they come off the loin. It is quite apparent from these figures that the costs of processing and, particularly, distributing pork are away out of proportion, in relation to the return for producing it. There is something wrong with our system of distribution, undoubtedly, when we find a situation of this kind.
Looking again at this example, I suggest that the packer does not require a margin of 22-4 per cent-because that is what his $10.50 amounts to. Surely he does not require that much for the killing and distribution of the pork. The committee on prices which met some two or three years ago, and of which I was so unfortunate as to be a member, heard a good deal of evidence on this point. We were told that over a period of twenty years packers had lost money on beef and had made it up on pork. I would suspect that they are making it up even more rapidly at the present time.
Surely this margin is not necessary. Further, I do not think the chain store requires a margin of better than 30 per cent in order to handle pork profitably. I am sure the chain store could handle it on a smaller margin and still make a good profit. We realize that the independent butcher is entitled to a greater margin because, in most instances, he gives more service. But even so I do not think he requires a profit of 52 per cent to perform the service of cutting up the carcass of pork, parcelling it and holding it for a certain time in his store.
I believe strongly that the consumer is entitled to know who is getting the money he spends for his meat and, in fact, for any of the other basic commodities he must buy in order to live. I believe if that information were in the hands of Canadian housewives, and made available to them regularly in a form by which they could readily see how much of the dollar they spend for pork or beef, or for any other commodity, goes to the producer, and how much to the processor or the retailer, public opinion would very rapidly drive down many of these prices and cut the margins.
My suggestion in that regard is that members of the staff of the bureau of statistics

should be assigned to the job of gathering information along these lines, as it would apply to the chief centres of population in Canada, so that such information might be released every week. In one week the bureau could release a breakdown of, we will say, the price of pork, while in another week it could give the information in connection with beef, or various items of clothing. I believe that if this were done the newspapers would be pleased to give such information full publicity. I can imagine nothing more likely to cause store operators and others to begin hauling down prices than large numbers of irate housewives making the accusation that those store operators are taking 50 per cent, 30 per cent or whatever it might be as their share for the handling of the products.
Let me take one example in the manufacturing line, because so far as manufactured goods in Canada are concerned we find a situation anything but reasonable. Nearly all manufactured goods are priced considerably higher than in the United States; there is no question about it. Let us look at automobile prices. A two-door model of a well-known so-called low-priced automobile, one of the best known on this continent, sells in New York for $1,598, while in Ottawa, from information supplied by the dealer, it sells for $2,335. Why is there this difference of $737? I can see no reason for this difference in price. And so that there may be no misunderstanding, let me put another set of figures on record. In Ottawa the four-door sedan sells for $2,402, while at Ogdens-burg, a distance of only about 60 miles to the south, but in the United States, the same model sells for $1,778, or a difference of $624. Why there should be this difference in respect of the two models, I cannot say.
There is no justification for this great differential in prices. As was stated by the hon. member for Peace River (Mr. Low), the people of Canada-and I can speak with certainty with respect to the people of western Canada at any rate-are becoming more and more angry because of these differences in prices. Out there the differential is even greater, because there is another $200 by way of freight to be added to the Ottawa price before delivery can be made at Regina or Calgary. The people are becoming more and more angry when they see the terrific differentials in prices of automobiles, and they cannot be blamed.
The difference in prices in the two countries can be explained partly by government taxes. The automobile dealer to whom I spoke told me he did not know the exact amount of government tax on the cars on
The Address-Mr. Harkness which he quoted prices, but he said it was something less than $500. If there were no taxes in the United States, that fact would explain the major portion of the difference in price. The fact is, however, that over there they have taxes. While the taxes imposed by this government explain part of the difference in price, they do not explain anything like these amounts of $624 or $737. There is still a great deal left to be explained.
Are wages paid by automobile manufacturers in Canada higher than those in the United States? The answer is: No, wages are less. Are costs for land and buildings greater in this country that they are in the United States? Again the answer is: No, they are less than similar costs in the United States. In other words the Canadian manufacturers in these respects have an advantage over manufacturers in the United States. It is true that certain automobile parts are not manufactured here and therefore must be imported, thus increasing the Canadian price of the car. But the fact that the manufacturer is paying less by way of wages and that general factory costs are less in Canada should offset, and indeed more than offset, these additional costs of parts. The only conclusion to which one can come is that either our factories are inefficient or they are taking a much higher profit than is taken by factories in the United States. What the answer is, I cannot say; but it seems to me it must be one or the other.
There is of course another factor entering into the higher price in this country. I have always understood, and I believe it is true, that the dealer gets approximately 20 per cent of the price of the car. On that basis, the New York dealer would get about $300 whereas the dealer in Ottawa on the same car would get about $450, or in other words about 50 per cent more.
What I do know is that since the war all the automobile dealers I have known in this country have been doing extremely well. I see no reason in the world why a man must receive $450 for selling an automobile in Ottawa when for the sale of the same car in New York the dealer would receive only $300, or perhaps a little more than that in Ogdens-burg. If anything, it should require less expense to sell in Canada, because labour costs for mechanics, as well as costs for garage space, are less in Canada than in the large American cities.
That is one factor which increases the total cost. I merely took automobiles as an example, but you find the same sort of situation so far as nearly all manufactured articles are concerned, particularly appliances of all

The Address-Mr. Mclvor sorts, refrigerators, washing machines, mix-masters, and so on. Prices in Canada are much higher than in the United States, and are out of proportion. It seems to me that the time arrived some time ago when our factories became large enough to reap the advantages of large scale production, of the assembly line and so forth, and that many of them should be in a position-automobiles for one-to compete on even terms with United States factories. In view of the fact that they get some of their raw materials cheaper, that their labour is cheaper, and that their sites and so forth are cheaper, they should be able to beat United States prices rather than charging considerably more for their products. Under these circumstances it seems to me that one avenue of bringing down prices which should be explored is an examination of tariff schedules which make it possible for a manufacturer to charge just a few dollars less than it would cost to import the article manufactured by him.
These two or three suggestions may not be valuable. However, if followed through I think some of them might produce useful results. The situation this year so far as the throne speech is concerned is that one has such a basket of riches to choose from, all things for which one can criticize the government severely, that it is difficult to make one's choice. On this occasion I have chosen to speak about this matter. I sincerely hope, as the leader of this party said this afternoon, that a full opportunity will be given at a later date for a discussion of defence matters, the question of housing and also veterans' affairs. These are three things which very much need to be dealt with at this session, and I hope that we can produce better results than have, as far as I know, been achieved so far.


Mr. Daniel Mclvor (Fort William):: Mr. Speaker, after listening to the big guns of this house blasting hon. members with food1 for thought, perhaps a gun of small calibre will scarcely be heard, but there are a few things I have observed during the last two months on which I think something should be said. First of all I noticed that the Prime Minister (Mr. St. Laurent) and; the leader of the opposition (Mr. Drew) did not have to speak of the character and ability of any hon. members who had passed on to their reward, and I think it is our duty to thank Him who has spared us to come back here to measure up to our tasks.
I commend the government for making an attempt to change the hours of sitting so that those of us who retire at a decent hour will not have to remain here until eleven


o'clock. I am sure that good will come of it. As far as I am concerned I prefer to sit from half-past one to seven o'clock instead of closing at eleven.
I noticedi that the leader of the opposition and the leaders of the C.C.F. and Social Credit parties all dealt particularly with inflation. I have read the amendment and the amendment to the amendment, and I should like to read again the paragraph in the speech from the throne referring to inflation. It is as follows:
The concern of our people over the rising cost of living resulting from international and domestic inflationary pressures is fully shared by the government. Every measure will be taken which my ministers believe will be effective in counteracting inflation without impairing our free institutions. The anti-inflationary measures already in force have checked the upward trend of prices of goods and services affected by their operation.
I may be dumb, Mr. Speaker, but as I read the amendment and the subamendment I take it that they are supporting the government in their anti-inflationary measures, and that is good enough for me. I know that we want control of the right kind. I do not want anybody to tell me how I am to spend my money, but we have to remember that those with small incomes find it very difficult to make their monthly cheques go around. However, when reading the newspapers before I came here and listening to some of the addresses by opposition speakers over the radio, I wondered how many homes are poverty-stricken in Canada today. How many people do not have enough to eat because of inflation? How many children do not have clothes fit to go to school? From my observation our school children have never been better dressed, and there are more bicycles at the public and high schools than I have ever seen.
I find also that our people have lots of money to spend, and they spend it. I am glad to see that because if you keep money circulating you are going to have good; times. I attended a football game on Saturday afternoon. I thought a bleacher seat was good enough for me. It cost me $1.25. I understand that one can pay up to nearly $4 for a seat; yet all the seats were occupied and many people were standing. Why? You cannot say that because of inflation and hard times people were not able to go to the football match. Our picture shows have never been better attended than they are today. On Saturday night there was a big crowd at the hockey game. Where did they get their money if the high cost of living is taking it?


An hon. Member:: Family allowances.


Daniel (Dan) McIvor: We harve money to spare for a great many things. Never in the history of

Canada has so much money been spent on liquor. About $740 million was spent in Canada last year on liquor. There is also a good deal spent on travel. With respect to cigarettes, more money is spent on cigarettes today than ever before. Why? Because people have the money and: are not denied that privilege because of inflation. I should like to congratulate the Minister of Finance (Mr. Abbott) that he did not fall for the plea of the corporations which manufacture cigarettes andi cut their taxes. If he had cut the taxes on cigarettes, then right across the board) he would have had to cut the taxes on other things more important than cigarettes.
I know that we want control. I want control of the right kind, and I am patiently waiting for our government to measure up as usual in this time of crisis as they have measured up in the past. They may find that there are a few people who desire to make * a killing at this time, and I am sure the government will watch them. I congratulate the Minister of Justice (Mr. Garson) on the way he has administered the Combines Investigation Act. The bakers in the west could not get away with their killing. He caught them in time, and there is more coming. I congratulate the Minister of Justice on his splendid job.
So much for inflation. We have other things to think of at the lakehead, although of course we think about inflation and hope that a way will be found. We have a bottleneck at the lakehead because we cannot find the shipping to deliver our wheat to the old country. We cannot find storage; and that brings me to this point. If we had the St. Lawrence waterway completed, ships could come right to Fort William and Port Arthur to load grain and take it to Europe. To me that is one of the outstanding arguments in favour of such a great waterway system. I should like to congratulate the Minister of Transport (Mr. Chevrier) for the way he is sticking to his guns. I know it is likely to help the provincial government of Ontario, but what about it? We will be very glad to have that waterway.
There are other things about which we at the lakehead have been thinking. I represent a group of people who do not drink very much liquor.


James MacKerras Macdonnell: What? At the lakehead?


Daniel (Dan) McIvor: They are an influential group and some of them have told me in very plain language that liquor advertising should not be carried over the radio. I do not think it should either. Liquor advertises itself. If you give a man a bottle, when he consumes
The Address-Mr. Mclvor half of it and goes out on the street he will advertise the nature of the liquor business. Give him a drink or two and let him take charge of an automobile and you will see how he will advertise the liquor business. There is the man who takes his cheque to the beer parlour and gets it cashed. As an honest man, he could not get it cashed without buying something. He comes home and he has not as much money as he expected to have. You can tell by the families of such men what the liquor business is.
I know that there are magazines in Canada-and I am very reluctant to buy one of them-which will tell you that this is the sweetest blend, the most beautiful mountain dew, that it will exhilarate and build up the human mind and body, but they never tell you about the destruction caused by the liquor business. I warn the minister or anybody else who supports such action that if the radio people dare to advertise the liquor business there will be a fight on our hands. I have never meant anything more seriously in this house than when I say that there will be a fight on our hands, and the contest between Daniel and the lion will have to take second place.
I did not say anything about the mover (Mr. Cauchon) and the seconder (Mr. Simmons) of the address in reply to the speech from the throne. I enjoyed our friend from Quebec. My French is very limited, and what I have learned in the past is pretty well all gone, but I understood his gestures and his enthusiasm and I interpreted them to my own sweet content. I think the hon. member for Yukon-Mackenzie River (Mr. Simmons) should be congratulated upon emphasizing the need of assistance for the individual prospector who is not working for the large corporation. These men have done a great deal for Canada. I once had a resolution on the order paper dealing with this matter, and while it got fair support it did not result in anything definite. These prospectors go out on their own for months and months at a time and when they make a find the government, either provincial or dominion, should investigate the prospect and then if the mine is developed the government could take back its costs.
When I think of the war I think of some of these committees that call on me from time to time. I have had people call on me to advocate taking our troops out of China, to advocate having the British take their troops from the Suez canal, to advocate our not doing anything that tends toward war. I told one group most decidedly that the great need is to demolish the iron curtain. Let the people of Russia see what is going on in Canada, in

The Address-Mr. Gillis the United States and Great Britain; let the people of the democratic world see what is going on in Russia.
I have said before and I say again that neither Russia nor China can win a war, any more than Hitler or Napoleon could, because they have left God out of their form of government. The great Peacemaker said: "Blessed are the peacemakers"; but he also said:
Neither cast ye your pearls before swine, lest they trample them under their feet, and turn again and rend you.
What are they doing in China today? They are tormenting, persecuting and liquidating the Roman Catholic and Protestant missionaries. Therefore I say we should not cast our pearls before those people. We must stand for what is fair and clean and good, and back up our government in its preparations for war. I know what it is to go to school where there were a few bullies. You cannot liquidate a bully, but you can lick him. That is the only cure for some bullies. I do not think Russia will ever attack any country because they have not the courage to do it, especially when they know we are prepared. I remember one chap in our school who prepared himself to meet one of the bullies, and that was the end of that bully. When we are thoroughly prepared we will be ready for action. We must keep first things first.
I congratulate the government upon its sturdy way of doing things. If they can find a way out of this inflation, a way that will allow us to think and act for ourselves, they will have gained the commendation of all Canada.


Mr. Clarence Gillis (Cape Breton South):: Mr. Speaker, I listened with considerable attention to the mover (Mr. Cauchon) and the seconder (Mr. Simmons) of the address. The hon. member for Beauharnois delivered his speech in an able manner, but I was not able to understand all that he said. He made one observation with which I do not exactly agree when he referred to the seaway project. He is reported as having said that he felt that all the members of this house and all the people of Canada would give unanimous support to that project. In passing I just want to assure him it is in connection with that particular observation that I do not agree with his speech.
The throne speech could well be an election document. It covered everything in all provinces. It catered pretty well to every section of society. It contained something for everybody in Canada. I read it over, and I thought if I were the Prime Minister, with the international situation as it is, I would write that kind of document for the
[Mr. Mclvor.l
election next June. When you finish all the issues, promises and hopes that are in this particular speech, you wonder what the Prime Minister will find for 1953. It covers nearly everything.
Before I mention what I really want to say in regard to the subject matter of the speech,
I should like to mention one particular item about which I am very pleased. That is the decision by the federal government, agreed to by the provincial governments and sanctioned by the engineers, to construct tne causeway across the strait of Canso. Although promises have been made many times over the years, at least it is now on paper. In reading the newspapers I noticed that the premier of Nova Scotia, Hon. Angus L. Macdonald, delivered a lengthy press statement. He went back over the years to the first survey which was made about fifty years ago, and thanked everyone who had anything to do with the project. He thanked boards of trade, chambers of commerce and the public at large. I have had a little to do with this project myself in the last twelve years. I have thought a lot about it, and talked about it. No doubt through an oversight the premier of Nova Scotia neglected to mention the federal Minister of Transport (Mr. Chevrier). As one who has been closely associated with the minister in dealing with this particular project, I want to make up for that oversight by thanking the minister. With all due respect to boards of trade, chambers of commerce and everyone else, I do not think anyone was more interested or worked harder for that project than the minister. I have had on the record and off the record discussions with him. I know that he must have been quite pleased when he found the speech from the throne contained a definite undertaking that the project for which he had worked so hard would finally be brought to fruition.
In discussing the project about four years ago, while it was still a doubtful possibility in the minds of the engineers, I told the minister I was confident that at some time the project, either a bridge or a causeway, would be undertaken. The reason for my confidence at that time was the interest of the minister in that particular project. I suggested that when the bridge or causeway was finally completed, it should be called the Chevrier permanent crossing which links the mainland of Nova Scotia with the island of Cape Breton. I want to thank the minister, because I know he worked hard for the plan. I do not want to forget our own minister in the cabinet, the Minister of Resources and Development (Mr. Winters). Since he came into this house I know that he has been

The Address-Mr. Gillis
working hard for the project. 1 can say that now because I had off the record discussions with him. He supported the plan and pushed it. I am pleased that one of the things about which I have felt keenly for a number of years has finally reached the paper stage, and has become a part of the program of public investment to be carried out in the near future.
This afternoon, Mr. Speaker, there was considerable discussion concerning the control of prices. The leader of the opposition (Mr. Drew) expressed his view, as did the Prime Minister (Mr. St. Laurent) and the leaders of the C.C.F. and Social. Credit parties. I believe every member of the house should be thinking about the problem and expressing some opinion on it. We can all agree it is the one important problem that faces this country today. It is the one issue about which we have to do something. When I read about NATO conferences, economic aid overseas, the doings of the United Nations and the appropriations of money necessary to keep these organizations going -they are all necessary-I sometimes think we are missing the boat.
For some time I have thought that there is not much danger of an immediate war. Of course the more prepared we are for it the longer that day will be in coming. I do not think the communist party expects a war. They have another way of doing it. They can wreck our economy by inflation. In the period they have set for themselves-they have a timetable for all these things and do not guess-as the period of national revolution, they will not do any of the fighting. They are going to promote a breakdown of our democratic institutions, and soften up the country against the time when they move in. This was the plan followed in Europe, and the war helped it. Of course, I think Uncle Joe is sitting back. He is quite prepared to fight in China to the last Chinaman, so long as he can keep us involved in a war there. Spending a lot of money on defence is the most inflationary kind of spending. The weapons the communists are using are to
create dissension and unrest among our own people, to have strikes and create lack of confidence in our institutions. This weapon of inflation which they are using at the present time, if we do not watch it, can undermine all the other activities in which we are engaged.
This matter of inflation is one of the devices about which we have to do something. I do not want to get involved in a discussion of the mechanics of the thing at the present time, because time is too short. I did not agree with the Prime Minister (Mr. St. Laurent) this afternoon, but that does not mean that I am right or that he is right. I do not agree with his comparison of Canada and the United Kingdom in discussing inflation. There is no similarity between the economies of the two countries. Britain is fighting her way out of the ruins of a war and the cost of rehabilitation. This is something we do not understand. It is a problem Britain has which we do not have.
Then there is the matter of price controls in Britain. I do not believe price controls will work in any country which has to import practically everything the people eat, wear or manufacture. I do not believe subsidies can be successfully applied to that kind of economy, because that country has not control of its price structure. The prices they have to pay for the goods they need are determined outside of the country. I feel that Canada and the United States are not only definitely influencing world prices, but are actually fixing world prices. The beating that Britain had to take in the devaluation of her currency, the large amount of imports she has to have which make it impossible for subsidies to work effectively in controlling her prices, completely change the picture from that existing in Canada or the United States.
On motion of Mr. Gillis the debate was adjourned.


[Stage Direction]
At seven o'clock the house adjourned, without question put, pursuant to the order of the house passed on October 12, 1951.
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Tuesday, October 16, 1951